Budget Deficit and Jordan’s Current Account Deficit: An Empirical Study 1977‐2008

In this research, we attempted to investigate the current account deficit and its relationship to some macroeconomic variables. Using variables such as those adopted in the traditional income/expenditure model, the results indicate that those variables explain, in an acceptable way, the current account imbalances. The current account deficit is linked to budget deficit, interest rates, income, terms of trade and government spending.