The Impact of Stock Market Volatility on Economic Growth (Jordan’s Case)

Developing countries’ financial markets have witnessed several unexpected fluctuations over the previous twenty years. Such fluctuations had caused a serious impact on these markets and have caused financial turmoil that had reached the uncertainty point in the region. Due to this effect, stakeholders should work to absorb these effects and work to document them for future reference. Jordan was among the countries which were affected by these factors and thus has been selected as a case for providing an empirical vision. This paper analyzed Jordan’s stock market (ASE) during periods of high volatility. And highlighted the volatility effect of efficiency and consequent outcomes in this market. This study has examined the volatility impact of Jordan’s Stock Exchange (ASE) on the country’s growth during 2004-2018 using GARSH and ARSH tests. The study results pointed out that sudden and continuous fluctuations in the shares prices for ASE are the major causes which distorted Jordan's economic growth. In light of this result, researchers recommend that in a bid to prevent ASE continuous vibrations in the stocks prices, employment volume, professionals’ quality levels, and craftsmen should be strengthened.