The purpose of this study is to examine equilibrium relationships and dynamic causality between economic growth (measured as GDP), exports, and imports in Jordan using time-series data between 1976 and 2021. In particular, this research attempts to determine exports-led growth, imports-led growth, growth-led exports, and growth-led imports in both the short-run and long-run. The four time-series datasets, GDP, merchandise exports, merchandise imports, and gross capital formation, were examined using the Dickey–Fuller unit root tests, the Phillips–Perron unit root test, and the Johansen’s trace tests for cointegration. The dynamic properties of the VAR(1) were summarized using Granger causality tests and impulse response functions. The test results showed that the impulse response functions indicated that there might be some short-run relationships among our datasets. The Johansen cointegration tests suggested that the series were not cointegrated, and hence there were no long-term relationships among the time series. It appeared that in the short-run, both GDP and gross capital formation Grangerly caused merchandise exports. A unit shock in merchandise exports, merchandise imports, and gross capital formation caused very small fluctuating responses from GDP, merchandise exports, merchandise imports, and gross capital in the short-run, and the responses approached zero in the long-run.

This research examines the short-run and long-run relationships between inflation and economic growth in Jordan during 1977-2021. A two-variable VAR model with three lags was conducted to systematically capture the dynamics in the two-time series, inflation, and economic growth. The dynamic properties of the VAR (3) were summarized using impulse response functions and variance decompositions. There was no long-run relationship between inflation and economic growth, instead, a potential positive short-run relationship exists. Our findings are aligned with the existing body of literature on the nexus between inflation and economic growth; the results of our study can be utilized formulate macroeconomic policies by promoting economic growth which in return provides a stable economic environment without causing inflationary pressures. It could also be utilized by other countries with similar economic structures. Therefore, it is suggested that the country should maintain a moderate inflation rate for short-run growth. JEL classification numbers: E6, E31, O11. Keywords: Inflation, Economic growth, Jordan, SDGs, Vector Autoregressive Model.