Relationship between Workers' Remittances and Money Supply from 2000 to 2018: Using the Vector Autoregression Model

Abstract

This study aims to analyze the quality and nature of the relationship between workers' remittances and money supply (M2) in Jordan from 2000 to 2018. The descriptive approach and standard statistical analysis method are employed to construct and analyze the model using Eviews. The results of the unit root test reveal the stability of the current study’s variables at the second difference. Granger causality test indicates that a causal relationship exists between workers' remittances and M2 of workers' remittances. The analysis of variance regarding the importance of workers' remittances in the interpretation of M2 confirms the positive impact of workers' remittances on M2. The results of the two variables are also integrated, thereby yielding at least one integration between the two variables at the level of statistical significance.