The Role of Government Capital Expenditures in Economic Growth in Jordan

Abstract

This research aims at examining the role of government capital expenditures in economic growth in Jordan during the time period . The study collects the required data from the Central Bank of Jordan, the Department of Statistics, and the Ministry of Finance database. The analyzes is based on estimating the output as a function of input and control variables and analyzing the Gross Domestic Product (GDP) as a function of the total capital expenditures. The study found that first, the change in capital expenditures as a percentage of GDP has long-term equilibrium and has a short-term effect, but this result is unreliable due to model instability. Second, there is a short-term impact of net fixed capital formation and net tax on economic growth but there is no long-term equilibrium, and finally there is a short-term and long-term effect of government debt on economic growth. These findings can provide significant insights into many aspects of implementing policy in Jordan.

Institutional Quality and Economic Growth in Jordan: New Evidence Using an Autoregressive Distributed Lag (Ardl) Model

“…Figure 1: The GDP per capita growth rates and institutions index in Jordan Therefore, this study extends previous empirical studies by (Assaf, 2014;Alrabadi & Kharabsheh, 2016;Al-khawaldeh & Alqudah, 2018;Obeid & Awad, 2018;Al-Tamimi & Jaradat, 2019;Al-Sharif & Bino, 2019), by integrating the roles of institutions in growth theories. To do this, the autoregressive distributed lag (ARDL) approach of PesaFran et al (2001) has been employed.…”

“…Investigating the determents of economic growth has been the concern of researchers and policymakers in Jordan. Many empirical studies have been conducted, such as those by(Abdul- Khaliq et al, 2013;Assaf, 2014;Alrabadi & Kharabsheh, 2016;Al-khawaldeh & Al-qudah, 2018;Obeid & Awad, 2018;Al-Tamimi & Jaradat, 2019;Al-Sharif & Bino, 2019). Most of the above studies demonstrate the influence of macroeconomic factors on economic performance.…”

Anteseden Pertumbuhan Ekonomi: Pendapatan atau Belanja Daerah?

“…Berdasarkan bukti empiris dan teoretis, hipotesis yang dikembangkan adalah: H2: terdapat pengaruh positif pertumbuhan pendapatan asli daerah terhadap pertumbuhan ekonomi H3: terdapat pengaruh positif pertumbuhan belanja modal terhadap pertumbuhan pendapatan asli daerah Teori Keynesian mengenai pengeluaran pemerintah sejalan dengan spend-revenue hypothesis yang menempatkan hubungan positif antara perubahan belanja dan perubahan pendapatan (Kiminyei, 2018). Secara empiris syarat hubungan antara belanja pemerintah dan pertumbuhan ekonomi dapat terjadi dalam kondisi tertentu (Yilgör, Ertugrul and Celepcioglu, 2012;Mehrara et al, 2013;Al-Fawwaz, 2015;Udoka and Anyingang, 2015;Muzdalifah and Siregar, 2018;Susetyo et al, 2018;Al-Sharif, 2019). Hubungan antara pertumbuhan ekonomi dan alokasi belanja pemerintah melalui kebijakan fiskal tidak dapat berdiri sendiri tanpa mempertimbangkan kebijakan pendapatan negara atau daerah (Lojanica, 2015;Mulyani, 2016;Arwakom, Falah and Wijaya, 2017;Jati, Ilmiyana and Sari, 2019).…”

“…Hasil ini berbeda dengan kerangka teori pertumbuhan ekonomi dan pengeluaran pemerintah yang menitiberatkan pada investasi kembali dan peningkatan aggregate demand sebagai indikator peningkatan pengeluaran pemerintah dan dapat mendorong transfer kesejahteraan kepada masyakakat. Secara empiris teori ini terdukung oleh penelitian Mehrara et al (2013), Muzdalifah and Siregar (2018), Susetyo et al (2018), Al-Sharif (2019.…”

Trend of Fiscal Expenditure’s Economic Effect

“…The long-term growth effect of fiscal expenditure is weaker than that in the short term [6]. Chen (2017) [7] and Sharif & Bino (2019) [8] respectively proved that fiscal expenditure promotes short-term GDP growth in China, but it was not obvious or even showed a negative impact in the long term. To summarise, most scholars believed that the economic promotion effect of fiscal expenditure weakened over time, even inhibited investment and growth.…”