The Role of Imports on the Convergence of the Jordanian Economy towards a Competitive Economy

The Jordanian economy is a small and opened economy, where imports occupy a considerable amount of the balance of payments’ current account. The Jordanian government continuously tried to reduce imports and increase exports; however, its efforts did not achieve the targeted goals. The purpose of this paper is to examine the effect of imports on economic growth in Jordan; i.e., we will determine whether imports have a positive or negative effect on the economic growth in Jordan. We will use a time series analysis to investigate the effect of total imports as a percentage of GDP on the Jordanian GDP per capita. The data covered the period from 1992 to 2017. The importance of this paper lies in evaluating the effect of imports on the Jordanian economy’s path towards a competitive economy. The time series analysis indicated that there is no cause-and-effect relationship between imports and economic growth, with the exception of imports from India having an elasticity of less than one.