The Relationship between Public Debt and Economic Growth in Jordan for the Period (1990-2018)

Abstract

The study aims to identify the effect of public debt on economic growth in Jordan between1990 and 2018. The importance of the study lies in the effects of net public debt on the Jordanian economy and economic stability, and thus the identification of the role of public debt in Jordanian economic growth. To achieve the aim of the study the descriptive analytical approach was used. Simple Linear Regression (SLR) has been employed to measure and analyze the relationship between Net Public Debt (NPD) and Gross Domestic Product (GDP). The study showed that there is a clear negative relationship between the ratio of NPD to GDP and the rate of economic growth in Jordan during the first period of the study, and this relationship became more clear during the period 2006-2018, and this negative relationship became strong when the public debt ratio to GDP exceeded 80.0%.

Keywords: Gross Domestic Product (GDP), Net Public Debt (NPD), Net External Debt (NED), Net Domestic Debt (NDD), Economic Growth (EG), Jordan.

DOI: 10.7176/JESD/11-12-09

Publication date:June 30th 2020