vol 25 no2,2025

Determinants of Fiscal Multiplier: The Case of Jordan

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Determinants of Fiscal Multiplier: The Case of Jordan

Abstract:

This study analyses the effects of public and government revenue on economic growth by assessing fiscal multipliers. The study also assesses the impacts and value of the determinants of the fiscal multiplier, including public debt, trade openness, and the exchange rate during the period (1998-2022). The aim of the study is achieved by employing the ARDL (Autoregressive distributive lag) during twenty-four years. The data that was gathered was analyzed using E-Views 13 software. It helps highlight the long and short-run effects of variables. The addition of determinants slightly reduced the estimated fiscal multiplier of public revenue, according to the study's results. The importance of the fiscal multiplier of government expenditure increased after adding its determinants. The study highlights that the Jordanian government must enhance its capital expenditure. It will contribute to economic development and growth. It will also encourage and attract investors to contribute to the Jordanian economy. Originality/Value- This study contributes significantly to Jordanian economic literature and the knowledge of concerned authorities. It indicates the direction of the Jordanian government and economic policymakers.

Keywords: Fiscal Multiplier, Government Expenditure, Public Revenue, Economic Growth, Jordan.

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