Abstract:

The relation between between monetary and fiscal policies is recurring theme ,also it has a crucial issue, where fiscal policy effect the action of monetary policy in various ways ,via short term in demand ,also it has via effect of the confidence and in long- run via the conditions of growth and low inflation, but enhance the monetary policy accommodative to fiscal policy or counter active. In this paper VAR, and SVAR are used, then the SVECM is utilized to have the results of paper such as to prove that the real money demand function can be existence in the long- run. Results indicates that the fiscal multiplier is too small in Jordan economy, in addition to monetary policy affects real output positively ,and it has effected the shocks and movements of inflation ratio. The inflation coefficient of the monetary rule by Taylor rule is (0.63),but its through FTPL rule is (0.67),and the debt coefficient of fiscal policy rule is (0.051)through Taylor rule, and by FTPL rule is (0.095. Key Words: Monetary policy, Fiscal policy, VAR, VECM, Granger causality, Jordan.

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