Stabilization policies in less developed countries: The case of Jordan, 1967-1988

Stabilization policies witnessed in less developed countries has been the focus of many studies in economics. This study is intended to shed light on some of those stabilization packages and their effects on the economies of LDC's, particularly, Jordan. What makes Jordan an interesting case study is its unique features, some of which are: (1) It is an aid receiving country, relying heavily on foreign assistance and grants, especially, from those Arab oil countries, due to its meagre natural and economic resources. (2) Jordan exports a highly educated, skilled labor to the Gulf countries, relying substantially on their private remittances. (3) It is a highly open economy, with imports exceeding GDP for some years.In this study a macroeconomic model will be developed to permit the analysis of both the demand and supply side effects of some popular policy prescriptions within a consistent macroeconomic framework. The policies may include currency devaluation, contractionary monetary policy, and a reduction in government expenditures. The implied system of structural equations of both the traded goods and non-traded goods, as well as the price level will be estimated for Jordan, using a yearly time-series for the period 1967-1988.U of I OnlyETDs are only available to UIUC Users without author permissio