Abstract:

The current account provides insights into trade, capital flows, financial stability, and international competitiveness. Policymakers, investors, and economists use this measure to monitor a country's economic health and to make informed decisions about trade, investment, and monetary policy. This study investigates the determinants of current account in Jordan, using an Auto-Regressive Distributed Lag approach to estimate the long- and short-run effects of fiscal balance, openness to trade, oil prices, foreign reserves, investment, and shocks for the period 1994-2021. The study provides support for the significant positive effect of fiscal balance and oil prices on current account, while revealing a significant negative impact of openness to trade and investment. It further shows that in the long run, the system tends to equilibrium, which is also confirmed by the effect of shocks, which is significant only in the short term, but not in the long run. Based on these results, the study concludes with evidence-based policy recommendations to grant the sustainability of current account.

Keywords:

Current account, Jordan, Fiscal Balance, Oil Prices, Openness, ARDL

How to Cite:

Nooh Alshyab and Malak Abu-Murad. Current Account Determinants in Jordan: An ARDL Approach. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a194/