5.9L Magnum V8

Why does the 1998 Grand Cherokee have a 5.9L Magnum V8 that only has 245 horsepower? Shouldn't an engine with a displacement that is that large have more power? Jeep's new 5.7L HEMI V8 has 360 horsepower, so isn't that a bit odd? Maybe the Magnum is just a very poorly designed engine?

The 5.9 wasn't a poor design. For its day it was a good performer. The 340 (and later 360) are great, reliable engines that were manufactured for over 3 decades.

The answer lies in newer technology. The SRT8's hemi uses an integrated engine management system that simply produces more HP along with better efficiency.

A little history lesson pulled from Wikipedia:

340 V8As
the Detroit power wars heated up in the mid-1960s, Chrysler decided to produce a small block V8 specifically designed for high-performance applications. The goal was to have a lightweight, high output engine equally suited for the drag strip or an oval track[citation needed]. The result of this decision was the 340 cu in V8. Chrysler's engineers increased the 318's cylinder bores to 4.04-inch (103 mm) while keeping the 318's 3.31-inch (84 mm) stroke. Anticipating higher loads resulting from racing operation, the engineers fitted a forged steel crankshaft instead of the cast nodular iron unit used in the 318. A 4-barrel carburetor was mated to a high-rise, dual plane intake manifold. This induction setup fed into a set of cylinder heads that are still considered one of the best of that era. The heads were high-flow items with big ports, and used 2.02-inch (51 mm) intake and 1.60-inch (41 mm) exhaust valves. An aggressive cam was fitted to take advantage of the much better breathing top end. 1968 4-Speed cars got an even hotter cam, but it was discontinued for 1969, where both automatic and manual cars shared the same cam. The engine was equipped with hydraulic lifters and two bolt main bearing caps, leading some to initially under-estimate the 340's potential. Power output was officially stated as 275 hp (205 kW) Gross for the 4 barrel and 290 hp (216 kW) Gross for the 6-pack version with triple 2-barrel carburetors. The 340's compression ratio was 10.5:1, placing it near the limit of what was possible on pump gasoline during that era. The 340 also used additional heavy-duty parts, such as a double-roller timing chain, sump-mounted windage tray and a high capacity oil pump.

In 1970, Chrysler offered a special version of the 340 that was specific to Challenger TA and Cuda AAR models. This version featured a heavy duty short block featuring additional webbing in block to allow for 4 bolt main bearing caps (aftermarket installed) and a double roller timing chain. The application-specific cylinder heads featured larger ports compared to a standard 340 and offset rocker arms that allowed the pushrods to be moved away from the intake ports for improved airflow. They featured an aluminum intake manifold with three two barrel Holley carburetors and a dual points ignition system. The best vintage road test data for these cars yielded quarter mile trap speeds of 100 MPH, which suggests roughly 275 "as installed" HP for a car of that curb weight, using Hale's Trap Speed formula (Peak Flywheel HP = (Trap Speed/234)^3 * race weight.

Contrary to undocumented claims regarding engines being "under-rated" during that period, the 340 was one the very few engines to be (almost) honestly rated by SAE Net ("as installed) standards, leading many to claim that the 340 was "under-rated for insurance purposes and really made [insert crazy HP claim here]." The 275 (Gross HP) rated 340 could actually produce 257 SAE Net HP and could produced 315 HP once all the typical-for-the-era "Gross" HP adding tricks were applied: http://i218.photobucket.com/albums/cc136/harddrivin1le_album/CSERE.jpg By the standards of the day, one could indeed argue that the 340 was "under-rated." Indeed, a multitude of vintage period road tests reveals that a "275 HP" 340 Dodge Dart was fully capable of running toe-to-toe with Chevy's "350 HP" 350 Corvette, which shared a virtually identical curb-weight. Indeed, a "275 HP" 340 Dart was more than capable of holding its own against Chrysler's own "335 HP" 383 big block Dart, which was only 130 pounds heavier. And indeed, a 340 Dart could run with the earlier (1966–1967) street hemi cars, although those cars were substantially heavier (in large part due to the weight of the hemi itself).

Due to the combination of rising gasoline prices, insurance companies' crackdown on high-performance vehicles, and the onset of inflation, the relatively expensive 340 was phased out. It was released in 1968 and remained a high performance engine through 1971. It was severely down-tuned in 1972, with the introduction of low compression (8.5:1), small valve heads, a cast crank, a less aggressive camshaft, and a variety of other unfortunate changes. It was replaced by the 360 engine for the 1973 model year.

Vehicles using the 340 [show]
Chrysler Valiant Charger (Australia)
Dodge Challenger
Dodge Charger
Dodge Dart
Dodge Super Bee
Plymouth Barracuda
Plymouth Duster
Plymouth Road Runner
Plymouth Sport Fury GT
This engine also powered the French Monica 560.

360 V8
The LA 360 (5.9 L) has a 4.00 in bore and a 3.58 in stroke. It was released in 1971 with a two barrel carburetor. The 360 used the large intake port 340 heads with a smaller intake valve (1.88 inch). In 1973, a 4-barrel version was released. In 1974, the 360 became the most powerful LA engine with the end of 340 production. After 1980, the 360 was primarily used in Dodge Ram trucks and vans. However, in some instances, the 360 was used in Dodge Diplomat police cars. Edit: With the possible exception of some rumored 'special factory cars', Diplomat police cars did not receive the 360 as factory equipment, however the 360 was available in civilian-package cars. The 1978-1979 Lil' Red Express truck used a special high-performance 360 4-barrel engine, with factory production code EH1 and was the fastest production vehicle in North America for those years.[citation needed]. The EH1 was a modified version of the E58 360 police engine (E58) producing 225 hp (168 kW) net @ 3800 rpm[citation needed]. Some prototypes for the EH1 featured Mopar Performance W2 heads[citation needed], although the production units had the standard 360 heads. There was also a "lean burn" version of the 360. The 360 was replaced for 2003 with the 5.7 L Hemi.
Magnum engines
In 1992, Chrysler introduced the first of a series of upgraded versions of the LA Engines. The company named their engine the "Magnum", a marketing term that had been used by the company previously to describe both the Dodge Magnum automobile and an earlier engine series; the latter was based on the big-block V8 engines of the 1960s-70s.

The Chrysler Magnum engines are a series of V6, V8 and V10 powerplants used in a number of Chrysler Corporation motor vehicles, as well as in marine and industrial applications. This family of gasoline-burning engines lasted for over a decade, were installed in vehicles sold across the globe, and were produced in the millions.

Following suit:
5.9L Magnum V8In 1993, Chrysler Corporation released the next member of the Magnum family: the 5.9L V8. This was based on the LA-series 360ci engine, and included the same upgrades and design features as the 5.2L. The standard 5.9L created 230 hp (170 kW) @ 4,000 rpm and 330 lb·ft (449 N·m) @ 3,250 rpm. However, Chrysler came out with the performance-oriented R/T version in 1998. This engine was provided with a more aggressive camshaft profile, and it was rated for 250 hp (190 kW) and 345 lb·ft (469 N·m). The 5.9L R/T came factory-installed in 1998-2001 Dodge Dakota R/T pickups and Dodge Durango R/T SUVs. The 5.9L Magnum was available until the 2003 model year, when it was replaced with the 5.7L Hemi V8 engine.[11]

Although the pre-Magnum ('71-'92) and Magnum versions of the 360/5.9 are both externally balanced, the two are balanced differently (the 360 Magnum uses lighter pistons) and each requires a uniquely balanced damper, flywheel, drive plate, or torque converter. Bore size was 4.00", stroke was 3.58"; compression ratio was 9.1:1.[2]

Vehicles using the 5.9 Magnum
1998–2003 Dodge Dakota
1992–2002 (and early 2003 models) Dodge Ram
1992–2003 Dodge Ram Van/Dodge Ram Wagon
1998–2003 Dodge Durango
1992–2001 Dodge Ramcharger
1998 Jeep Grand Cherokee 5.9 Limited

It was intended to be torquer, for towing, so the HP suffered somewhat.

There are lots of aftermarket goodies you can get for the 360 (5.9) to bump up the power.