The study aims to analyze the causal relationship between money growth represented by the growth rate of money supply in its broader definition M2, and growth rate of the Gross Domestic product. (Economic Growth) and growth rate of prices (inflation) by using annual date published from the Central Bank of Jordan during the period 1970-2013. The Methodology of the study include the Tests of Stationary, Granger Causality, Co-integration. The Johansen Co-Integration Test showed a lack of integration between the joint variables of the study which means that long run relationship between variables does not exist. The Granger Causality Exam showed a two – way causal relationship between money growth rate in its broader definition M2, and prices growth rate (Inflation) on the short run and also showed one-way causality from economic growth to the growth rate of money supply in its broader definition M2 in the short run.
Batarseh, Atif Issa Dr
"The Causal Relationship between Money, Output, and Prices in Jordan (1970-2013),"
Arab Journal of Administration المجلة العربية للإدارة: Vol. 37
, Article 3.
Available at: https://digitalcommons.aaru.edu.jo/aja/vol37/iss3/3