Does Financial Development Enhance Economic Growth in Jordan: Revisited Study
The current paper aims to evaluate the impacts of financial development on the economic growth in developing
country like Jordan a country with limited resources such as oil, agricultural land, and water. This study is very important
since the financial development reflect a notable share in the GDP for Jordan especially in the recent decade that witnessed
budget deficit rising due to different political and financial crisis events. The study investigates the causal relationship
between the financial development and economic growth (proxies by real gross domestic product per capita in constant
prices) over the 1978-2016 period. A Granger causality test is utilized on annual time series data. The results of the study
confirm a unidirectional relationship running from financial development to GDP, indicating that increase in financial
development causes perpetual rise in economic growth in Jordan.
Keywords- Economic Growth; Financial development; Granger Causality; Jordan.