Devaluation, relative prices and international trade : the case of Jordan (1980-1997)‎

Abstract EN

The primary purpose of this article is to determine whether there there is a long-run relationship between devaluation, relative prices and trade flows in the Jordanian economy for the period 1980-1997.

The methodology of this paper is based upon the cointegration technique.

The empirical results showed that : (a) in the case of Jordan imports demand.

No co integration vector has been found for the Arab countries, whereas it shows cointegration vector for the European countries, U.S.A, and Asian (non Arabic) countries P (b) in the case of countries demand for Jordan exports, non co integration vector has been found for all the selected countries.

The study recommends that large relative price swings are required to have an appreciable impact on Jordan's that large relative price swings are required to have an appreciable impact on Jordan's trade patterns.