The Short and Long -Run impact of Fiscal Deficit on Amman Stock Exchange Performance

The current study aims to investigate the impact of the fiscal deficit(FISD), current account deficit(CACD), and value traded (VTD)on the performance of the Amman Stock Exchange (ASE) as measured by the General Price Index (SPI) during the period1978-20018. The study used a co-integration test, (VAR), (VECM) and (FMOLS) and (VDC). The output of cointegration test, VECM, FMOLS and VDC indicate that (FISD), (CACD) and (VTD) have a long relationship with the (SPI). The results also indicate that (FISD) and (CACD) have a long run negative and significant impact on Amman stock exchange performance (SPI). While Value traded has a significant and positive long run impact on Amman stock exchange performance (SPI). The results also, indicated that (FISD) is the most effective variable in the long run with coefficient (-6.476723) and significant level 1%. In the short run VECM results shows that fiscal deficit has a significant and positive impact on (ASE) performance, while value traded has a significant and negative impact and current account deficit has an ambiguous effect.