F: International and National Economies

Abstract

The study appraises the relationship between the money supply (M1) and inflation in Jordan from 1980 to 2019. It uses the Augmented Dickey-Fuller test to assess the stability of the variables, Johansen's Cointegration approach to test the long-term equilibrium relationship between variables, and the Granger Causality test to assess the direction of the causal relationship. Results of the Cointegration test show that there was no causal link between the money supply M1 and inflation in the long run. The Granger Causality results show a unidirectional causality running from the money supply M1 to inflation in the short term. (5 tables, references) 694/39*** On the wedge between the PPI and CPI inflation indicators Wei, S-J. and Xie, Y.