02322cas a2200253 a 4500 AALejournalIMF011452 230101c9999 xx r poo 0 0eng d 5.00 USD 9781463927257 1018-5941 BD-DhAAL BD-DhAAL Raissi, Mehdi. Oil Prices, External Income, and Growth : Lessons From Jordan / Mehdi Raissi, Kamiar Mohaddes. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper extends the long-run growth model of Esfahani and others (2009) to a labor exporting country that receives large inflows of external income?the sum of remittances, FDI and general government transfers?from major oil-exporting economies. The theoretical model predicts real oil prices to be one of the main long-run drivers of real output. Using quarterly data between 1979 and 2009 on core macroeconomic variables for Jordan and a number of key foreign variables, we identify two long-run relationships: an output equation as predicted by theory and an equation linking foreign and domestic inflation rates. It is shown that real output in the long run is shaped by: (i) oil prices through their impact on external income and in turn on capital accumulation, and (ii) technological transfers through foreign output. The empirical analysis of the paper confirms the hypothesis that a large share of Jordan's output volatility can be associated with fluctuations in net income received from abroad. External factors, however, cannot be relied upon to provide similar growth stimuli in the future, and therefore it will be important to diversify the sources of growth in order to achieve a high and sustained level of income. Mode of access: Internet Mohaddes, Kamiar. IMF Working Papers; Working Paper ; No. 2011/291 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/291/001.2011.issue-291-en.xml IMF e-Library