Gross Domestic Product, Number of Employees and Inflation Rate and Its Relationship to Private Final Consumption in Jordan

Jordan is affected by an increase in the ratio of public debt to a percentage of GDP. The increase rate has reached 85.8% (Jordan’s central bank in numbers). And this is a serious indicator that affects the economic conditions and living standards. The study dealt with the final private consumption and the factors affecting it. The first factor is the gross domestic product (GDP), and it is a reverse view of influence, consumption is one of the components of GDP through spending, which is influential and influenced by it, the second factor was the demographic effect, and the study took the number of workers as part of the demographic factor and the third factor is the level of prices. The study took the rate of inflation. In cases of inflation and high prices, the state resorted to reducing public spending and increasing taxes to reduce actual demand (Hardan, Tahir 1997). The study was from 2006 to 2016 as a sufficient period for measurement and the availability of accurate data. The study found that there is a relationship between the first and second variable and denied the relationship to the third variable, due to price fluctuations in the study period and one of the most important recommendations was to replace local labor with foreign labor.

There are theories that explain consumption, we mention them: 1. Friedmen theory 1957 (Awad, Talib 2015), which is based on the fact that income consists of two parts: permanent income and temporary income Y = Yp + Yt And by considering what is happening to the individual from the income that is known during the life period as a permanent income, either what happens to him in the length of this period from entering secondary commissions or bonuses is temporary Therefore, consumption is related to the type of income, so it is permanent and temporary consumption. C = Cp +Ct 2. Life Cycle Theory for F. Modigliani and Ando (Omaro Hassan 2018) The theory depends on time as the person at the beginning of his life and at the end of his life decreases his consumption because the income during this period is small while the average life is a high income due to productivity at this age, the theory also established that the individual at the age of productivity increases his savings with consumption as well, whereas, at the end of his life he spends these savings for consumption, thereby linking consumption to the individual's circumstances, age and social reality.

Keynesian theory of John Maynard Keynes (Dawod, Hussam 2010)
Which is based on that consumption is divided into two parts, independent or automatic consumption, which is consumption at zero income, and the second part, induced or continued consumption, which is the part related to income. C = Co +mpc*y whereas Co: Automatic consumption MPC: Marginal propensity to consume Y: income Keynes explained that mpc is a boundary mile between zero and one 0<mpc<1 The marginal slope of saving mps added to the mechanism of the marginal slope of consumption mpc equals one mpc + mps = 1  The indicator  2016  2015  2014  2013  2012  2011  2010  2009  2008  2007  2006   1660256  1607599  1460817  1444699  1443563  1436020  1412134  1400805  1342815  1312649  1227237  Labor force   1177245  1173730  1088865  1065318  1056003  1041263  1033015  1024529  991990  961059  912065   The number of male  workers   229395  224300  197823  197318  212090  209708  202933  195991  180711  179387  143782   The  number  of  female workers   1406640  1398030  1286688  1262636  1268093  1250971  1235948  1220520 Table 2 we note that the workforce in 2016 reached 1660,256 workers and it was increasing from 2006, and  the number of workers increased from 2006 to 1055847 employees to 2016 as they numbered 1406640 workers and  decreased in 2013 to 1262636, the percentage of males was always higher than females, and the percentage of  females was at the lowest level in 2006 and reached 143782 and the highest level in 2016 and It reached 229395, while the unemployment rate was at its lowest level in 2014 at 11.9 and the highest level in 2016 at 15.3 where the unemployment rate was always high for females, as it reached 25.6 in 2007, while male unemployment was 13.3, the highest in 2016.  Table 3, which expresses the consumer price index from 2006 to 2016 in each month of the year, considering that 2010 is a base year, we notice a marked decrease in the cumulative index, which is the average for all months of 2015 and 2016 over 2014. We note the fluctuation in the inflation rate from one year to the next, as it reached the lowest level in 2009, a decrease of -0.74 and the highest level in 2008, amounting to 13.97. This fluctuation and price instability can be explained by the economic factors affecting Jordan from neighboring countries and the external environment in intra-regional trade because of the wars surrounding Jordan.
In order to reach the standard analysis in explaining the factors affecting private consumption, we assume three equations and we test them according to the methodology mentioned above.

Previous Studies
The researcher reviewed some of the previous studies such as: Luca et al. (2020) conducted a study entitled "Going beyond Gross Domestic Product as an indicator to bring coherence to the Sustainable Development Goals". The study talked about promoting the sustainable goals in a holistic way and not achieving one of them, but rather working to promote all goals, for example, enhancing the individual's share of gross domestic income and neglecting the other goals, and that consumption and production are linked, not separable, and that increased growth should not affect environmental stability, as the study addressed the gross domestic product of the European Union and it is not related to employment levels and that focusing on one goal of sustainable development may hinder the achievement of other goals. The study found in one of its results that growth in gross domestic product as a single measure may give false signals to policymakers.
The study of Klinger & Weber (2020) entitled "GDP-employment decoupling in Germany". This study talked about the changing relationship between GDP growth and employment growth that reached 1.2% between 2006 and 2018 and about the process of separation with the effect that is due to the phenomenon of labor hoarding, which helped the short-term support policies in the event of recession, which helped in performing the labor market well with the conditions of recession in the gross domestic product, as it is known to increase the unemployment rate in the event of economic recession.
Maciej et al, (2019) study entitled "Relations of GDP growth and development of SMEs in Poland". It aims to explain the relationship between the gross domestic product and small and medium-sized companies and the role of these companies in solving the problem of unemployment in Poland. One of the hypotheses of the study was that there was a direct relationship between the components of the gross domestic product, including consumption and the development of small and medium enterprises. The study took the period between the years 1996 and 2016 and the contribution of these companies in raising the added value. The study also concluded that qualified young people are able to enter the market with entrepreneurial projects if the means of support are available from workshops and training courses. This result is a practical example for other countries that may suffer from employment problems in conditions of economic stagnation to adopt German policies in separating the impact of stagnation on employment levels.
Svenfelt et al (2019) conducted a study entitled "Scenarios for sustainable futures beyond GDP growth 2050". The study examines that economic growth is not a single goal for sustainable development, but there are other important goals such as climate, land, and resource security, goals that are no less important than growth, and that the future of cooperative economics and achieving self-sufficiency, and that linking economic growth with prosperity is not always correct, so it can be a cause of environmental degradation, as the study said that technological development is not a weapon that threatens work and will increase the rates of heroism, but it may be a reason to create new opportunities. The narrators of this study focused on reducing consumption, depleting resources and urging the production.
Saleh Bassam's Study (2018) entitled Estimating the Total Consumption Function in the Palestinian Economy for the Period (1994Period ( -2016 The aim of the study is to estimate the function of total consumption in the Palestinian economy in the previous time period the study consisted of several chapters from general concepts about consumption and the Palestinian economic reality and then the consumption function in Palestine. (2018) titled Determinants of Family Savings in Jordan. The study examined the factors affecting savings, including private consumption, the price index and other factors during the period . The effect varied between factors and family saving, and there was a positive relationship between consumption, savings and savings, and he denied other relationships, while other inverse relationships were found. And one of the most important results was a negative relationship between the price index and family saving and a positive relationship between private consumption and family saving, which is consistent with what came in the life cycle theory.

Al-Amr Hassan and others study
Ibrahim Khalil study (2015) entitled the impact of excessive consumption on the environment and the stability of price levels in the Iraqi economy during the years (2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013) The study dealt with the concept of providing financial resources to society, especially oil states, especially in the classes that are not aware of the importance of consumption and the harmful consequences of its excess. The problem of the study was the negative effects of consumerism on the environment and price levels. Among the most important recommendations were cultural awareness in the area of spending and working to make decisions to counter price rises.
The study of Anghelache (2011) entitled "Analysis of the Correlation between GDP and the Final Consumption", in which he presented the relationship between private final consumption and gross domestic product in Romania between 1990 and 2009 and he reached a direct relationship between consumption and GDP, as production increased with increasing consumption from 1990 to 2008, and the two decreased by 4-5% after that. He reached the linear equation so that increasing the final private consumption of one monetary unit increases the gross domestic product by 1.21 monetary units.

Methodology
The researchers use the Engle-granger methodology which is in two stages The first is to estimate the long-term equilibrium relationship model with a common integral regression Second Estimation of the short-term relationship model (error correction model) After testing residual stillness, self-correlation, Variation of variance, and normal distribution of residues.

Study Tools and Scales
For the purposes of proving or denying research hypotheses, a standard statistical analysis method will be adopted for all variables during the study period from 2006 to 2016 using standard methods for analyzing time series. It is the set of measurements and observations of data according to multiple time periods, and an appropriate number of chains is preferred (Al-Qadi, Dalal, 2005).
And after that, Unit Root Test, Dickey -Fuller (ADF), Common Integration, Long-Term Causal, and Error Correction Model as per Engle -Granger Methodology.

Testing the First Hypothesis
H0 null hypothesis: There is a positive direct relationship between GDP and private consumption at the significance level (0.05).
Alternative hypothesis H1: that there is no positive relationship between GDP and private consumption at the level of significance ( We apply the ADF test, to test time Series Stability using the data from Table 1. From Table 5, we note that the strings are stable in the first difference. We find the estimated regression equation by Least Squares. Prob (F-statistic) (0.000) is less than the level of significance (0.05), that is, there is a significant significance for F-statistic, and we take the null theory and say that 97.5% of the change in output is due to the independent factor GDP.
The prob for the independent variable (0.000) (GDP) is less than the significance level (0.05), meaning that there is a significant significance for (GDP) and we take the Nihilism theory.
The prob for the independent variable (0.0481) (c) is less than the significance level (0.05), meaning that there is significant significance for (c) and we take the null theory.

We are doing the ADF test
To test the residual stability, find the roots of the unit, and denote the remaining with the symbol (E1) according to the following table. We note from Table 8 that the prob-f value is equal to (0.0743) and it is greater than the level of significance (0.05). Therefore, we accept the null hypothesis, which is the existence of a second-degree correlation.
We are now testing the residual distribution by Null hypothesis H0: The existence of normal distribution Prob> 0.05 Alternative hypothesis H1: There is no normal distribution Prob> 0.05 We note from figure 1 that the value of probability is equal to (0.762398) which is greater than the level of significance (0.05), so we accept the null hypothesis, which is the presence of a normal distribution of the remainder, and we notice that from the graphical representation  Table 9 that Null hypothesis H0: There is a homogeneity in the error variance Prob> 0.05 ISSN 1923-4023 E-ISSN 1923 Alternative hypothesis H1: There is no homogeneity in the error variance Prob> 0.05 We take the nihilistic hypothesis. There is a homogeneity in the error variance F-statistic prob (0.9884)>(0.05) We take the nihilistic hypothesis. There is a homogeneity in the error variance Obs*R-squaredprob (0.9867)>(0.05)

Error Correction Form
We add the error correction factor as an independent variable to the model to find the estimated regression equation in the short term. The prob for the independent variable (0.0001) (GDP) is less than the significance level (0.05), meaning that there is a significant significance for (GDP) and we take in the null hypothesis The prob for the independent variable (0.0420) (E1) is less than the significant level (0.05), meaning that there is a significant significance for me (E1) in addition to the negative sign of the amount If the estimated regression equation after correction is for the short term DPCO = 0.935*DGDP -0.476*E1(-1)

Testing the Second Hypothesis
Null hypothesis H0: There is a positive direct relationship between the number of workers and private consumption at the significance level (0.05).
Alternative hypothesis H1: there is no positive direct relationship between the number of workers and private consumption at the level of significance (0.05).
And we put the following equation

PCO = C NE second
And using the number 1 and 2 The second equation  We note from Table 11 that the strings are stable in the first difference The prob for the independent variable (0.0001) (NE) is less than the significance level (0.05), meaning that there is significant significance for (NE) and we take the null theory.
The prob for the independent variable (0.0009) (c) is less than the significance level (0.05), meaning that there is significant significance for (c) and we take the null theory If the estimated long-run regression equation is PCO = -63229.33 + 0.0697*NE We apply the ADF test To test the residual stability and find the roots of the unit, we denote the remainder by symbol (E2) according to the following table  We notice from Table 14 that the prob-f value is equal to (0.4295) and it is greater than the level of significance (0.05). Therefore, we accept the null hypothesis, which is the existence of a third-degree correlation.
Then, we test residual distribution using the Jarque-Bera test  Null hypothesis H0: The existence of normal distribution Prob> 0.05 Alternative hypothesis H1: There is no normal distribution Prob> 0.05 We note from Figure 2 that the probability value is equal to (0.597058) which is greater than the level of significance (0.05). Therefore, we accept the null hypothesis, which is the presence of a normal distribution of the remainder, and we notice that from the graphical representation. The prob for the independent variable (0.0261) (NE) is less than the significant level (0.05), meaning that there is a significant significance for (NE). And we take in the nihilistic hypothesis The prob for the independent variable (0.0446) (E2) is less than the significant level (0.05), meaning that there is a significant significance for me (E2) in addition to the negative sign of the amount.

Testing the Third Hypothesis
Null hypothesis H0: There is a negative negative relationship between the rate of inflation and private consumption at the level of significance (0.05).
Alternative hypothesis H1: there is no negative relationship between the rate of inflation and private consumption at the level of significance (0.05).
And we put the following equation PCO = C IN using Table 1 and 4, then we perform the ADF test to test the stability of time series  Prob (F-statistic) (0.276180) is higher than the significance level (0.05), that is, there is no significant significance for F-statistic and we take the alternative theory The prob for the independent variable (0.27620) (IN) is higher than the significance level (0.05), meaning that there is no significant significance for (IN) and take the alternative theory.
Thus, this model is inappropriate and it is not possible to find a discretionary relationship in the short or long term

The first hypothesis:
We accept the null hypothesis (H0) that there is a positive positive relationship between the gross domestic product and private consumption at the level of significance (0.05) and that about 97.5% of the change in private consumption is caused by a change in the gross domestic product.

The second hypothesis:
We accept the null hypothesis that there is a positive direct relationship between the number of workers and private consumption at the significance level (0.05) and that about 83.1% of the change in private consumption is caused by a change in the number of workers.

The third hypothesis:
We accept the alternative hypothesis H1. There is no negative inverse relationship between the rate of inflation and private consumption at the significance level (0.05). The reasons for this could be the state of the economic recession, the stability or decline in prices, and the state of volatility in this period, as its impact was not evident on private consumption. And the inflation rate factor was not a causal relationship in the study period, as a study by (Luis J. Álvarez2011) indicated that the change in consumer prices was limited by the presence of inflation in oil prices in the euro area.

1.
Seek to increase the number of workers and reduce unemployment, especially among females.
2. Replace local labor with foreign workers within the legislative frameworks.
3. Promote ways to increase gross domestic product, especially foreign direct investment.