Purpose: This study aims to explore the causal relationship between gross domestic product, inflation rate, and Stock Prices in Jordan over both short- and long-term from 2008 to 2023.

Design/Methodology/Approach: The study applies a Vector Error Correction Model (VECM) to analyze monthly data spanning from 2008 to 2023.

Findings: The findings reveal evidence of bidirectional long-run causality between gross domestic product and stock prices, and a unidirectional long-run causality from inflation to stock prices in Jordan. It confirms the stock market’s dual role as both a reflection of and a contributor to macroeconomic performance. In the short-run, the results show limited causality from gross domestic product, but more significant short-run effects of inflation on both gross domestic product and stock prices, and from stock prices to inflation.

Recommendation: The recommendation highlights the importance of improved coordination among monetary, fiscal, and financial regulatory authorities to achieve two key objectives: macroeconomic stability and the growth of capital markets

Index terms: Gross Domestic Product, Inflation Rate, Stock Prices, Vector Error Correction Model.