The Influence of Macroeconomic Indicators on Economic Growth in Malaysia

The Influence of Macroeconomic Indicators on Economic Growth in Malaysia

One aim in macroeconomic policy is to achieve higher economic growth. The objective of this study is to examine the influence of macroeconomic variables in determining economic growth. In this study, technique Dickey–Fuller, cointegration, Granger test and Vector Error Correction Model (VECM) will b...

Full description

Saved in:
Bibliographic Details
Main Author: Nur Hazirah, Md Ludin
Format: Thesis
Language:eng
Published: 2011
Subjects:
HC Economic History and Conditions
Online Access:https://etd.uum.edu.my/3682/1/s804458.pdf
Tags: Add Tag
No Tags, Be the first to tag this record!
id my-uum-etd.3682
record_format uketd_dc
institution Universiti Utara Malaysia
collection UUM ETD
language eng
advisor Abdullah, Hussin
topic HC Economic History and Conditions
spellingShingle HC Economic History and Conditions
Nur Hazirah, Md Ludin
The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
description One aim in macroeconomic policy is to achieve higher economic growth. The objective of this study is to examine the influence of macroeconomic variables in determining economic growth. In this study, technique Dickey–Fuller, cointegration, Granger test and Vector Error Correction Model (VECM) will be use. The function of co integration test is to test the existence long-term relationship between the variable in the model. The period of time series data are from 1976 to 2008. Four macroeconomic variables will be using which are consumer price index, foreign direct investment (FDI), total government expenditure, and total export in Malaysia. Last result shows that exist 2 cointegrating equations at 5% level in Johansen cointegration test. Only FDI, CPI and government expenditure have one way causality with GDP. While export and GDP does not Granger cause each other. In VECM test, the value of the coefficient in this error correction term is exceed than 1, it shows that the short-run deviation goes rapid paths to the equilibrium in the long-run. It is important for government to take care the significant macroeconomic factors in this analysis in order to achieve a higher growth rate in future. Export diversification is the key in increasing the total of export. It will various the Malaysia product and help to expand Malaysia’s export earnings.
format Thesis
qualification_name masters
qualification_level Master's degree
author Nur Hazirah, Md Ludin
author_facet Nur Hazirah, Md Ludin
author_sort Nur Hazirah, Md Ludin
title The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
title_short The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
title_full The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
title_fullStr The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
title_full_unstemmed The Influence of Macroeconomic Indicators on Economic Growth in Malaysia
title_sort influence of macroeconomic indicators on economic growth in malaysia
granting_institution Universiti Utara Malaysia
granting_department College of Arts and Sciences (CAS)
publishDate 2011
url https://etd.uum.edu.my/3682/1/s804458.pdf
_version_ 1747827625013805056
spelling my-uum-etd.36822016-04-27T07:38:38Z The Influence of Macroeconomic Indicators on Economic Growth in Malaysia 2011 Nur Hazirah, Md Ludin Abdullah, Hussin College of Arts and Sciences (CAS) College of Arts and Sciences HC Economic History and Conditions One aim in macroeconomic policy is to achieve higher economic growth. The objective of this study is to examine the influence of macroeconomic variables in determining economic growth. In this study, technique Dickey–Fuller, cointegration, Granger test and Vector Error Correction Model (VECM) will be use. The function of co integration test is to test the existence long-term relationship between the variable in the model. The period of time series data are from 1976 to 2008. Four macroeconomic variables will be using which are consumer price index, foreign direct investment (FDI), total government expenditure, and total export in Malaysia. Last result shows that exist 2 cointegrating equations at 5% level in Johansen cointegration test. Only FDI, CPI and government expenditure have one way causality with GDP. While export and GDP does not Granger cause each other. In VECM test, the value of the coefficient in this error correction term is exceed than 1, it shows that the short-run deviation goes rapid paths to the equilibrium in the long-run. It is important for government to take care the significant macroeconomic factors in this analysis in order to achieve a higher growth rate in future. Export diversification is the key in increasing the total of export. It will various the Malaysia product and help to expand Malaysia’s export earnings. 2011 Thesis https://etd.uum.edu.my/3682/ https://etd.uum.edu.my/3682/1/s804458.pdf text eng validuser masters masters Universiti Utara Malaysia Abdel Hameed M. Bashir. (1998). Foreign direct investment and economic growth in some MENA countries: Theory and evidence. Journal of Economics. Retrieved from http://www.luc.edu/orgs/meea/volume1/bashir.pd Abu Nurudeen & Abdullahi Usman. (2010). Government expenditure and economic growth in Nigeria, 1970-2008: A disaggregated analysis. Journal of Business and Economics, 4. Adeolu Ayanwale. (2007). FDI and economic growth: Evidence from Nigeria. AERC Research Paper 165. Nairobi. April 2007. Akbar Ali. (2007, 12 September). Ekonomi positif bukan ‘propaganda’: Pertumbuhan kukuh bukti pencapaian cemerlang kepimpinan Abdullah. Berita Harian, p.11. Al Mamun K. A. & Nath, H. K. (2005). Export led growth in Bangladesh: A time series analysis. Journal of economics, 12, 361-364. Bank Negara Malaysia. www.bnm.gov.my Barro, R,. J. (1995). Inflation and economic growth. NBER’s Research Program in Economic Fluctuations, Growth and Monetary Economics. Massachusetts Avenue: Cambridge. October 1995. Baumol, W. J. (1986). Productivity growth, convergence and welfare: What the long run data show. The American Economic Review, 76, 1072-1085. Borensztein, E., Gregoria, J. D., & Lee, J. (1998). How does foreign investment affect economic growth?. Journal of International Economics, 45(1): 115-135. Blomstrom, M., Lipsey, R., & Zegan, M. (1994).What explains developing country growth?. NBER’s Research Program in Economic or International Trade and Investment. Massachusetts Avenue: Cambridge. August 1992. Bruno, M., & Easterly, W. (1998). Inflation crises and long-run growth, Journal of Monetary Economics, 41(1). Cahit Gungor & Ali Berk. (2006). Money supply and inflation relationship in the Turkish economy. Journal of Applied Science 6(9): 2083-2087. Chamhuri Siwar, Surtahman Kastin Hassan, & Norshamliza Chamhuri. (2005). Ekonomi Malaysia (6th ed.). Petaling Jaya, Selangor Darul Ehsan: Pearson Longman. College of Business of New Mexico State University. (2006). The 3 major macroeconomic variables: GDP, unemployment, and inflation. Retrieved from Lecture Notes Online Web site: http://cepfe.nmsu.edu/?q=node/177 Department of Statistics Malaysia. www.statistics.gov.my Duasa,. J. (2007). Malaysian foreign direct investment and growth: Does stability matter?. Journal of Economic Cooperation, 28(2), 83-98. Economics Division, Public Bank Berhad. (2000). Economic review December 2000. Kuala Lumpur. Author. Economics Division, Public Bank Berhad. (2002). Economic review August 2002. Kuala Lumpur. Author. Economic_growth. (n.d.). In Encyclopædia.com online. Retrieved from http://www.encyclopedia.htm/economic_growth Economy Statistics > Inflation, GDP deflator > annual % > Malaysia (historical data). (2010). Retrieved September, 23, 2010, from http://www.nationmaster.com/time.php?stat=eco _inf_gdp_def_ann-economy-inflation-gdp-deflator-annual&count ry=my-malaysia Erman Erbaykal & H. Aydin Okuyan. (2008). Does inflation depress economic growth?: Evidence from Turkey. International Research Journals of Finance and Economics, 17. Retrieved from http://www.eurojournals.com/finance.htm Error+Correction+Model. (n.d.) . In Acronyms The Free Dictionary online. Retrieved from http://www.acronyms.thefreedictionary.com/Error+Correction+ Model Fischer, S. (1993). The role of macroeconomic factors in growth. NBER’s Research Program in Economic Fluctuations and Monetary Economics. Massachusetts Avenue: Cambridge. December 1993. Foreign_Direct_Investment. (n.d.). Retrieved from the Foreign_direct_investment Wiki: http://en.wikipedia.or/wiki/ Foreign_direct_investment For the first time ever in history, Malaysia attracted less investment than the Philippines. (2010, November, 24). Retrieved from http://www.malaysiatoday.net/index.php?option =com_content&view=article&id=33348:media-statement-by-tony- pua-dap-national-publicity-secretary-and-member-of- parliament-for-petaling-jaya-utara-in-petaling-jaya-on-sunday-25-july-2010&catid=18:letterssurat&Itemid=100129 Government_spending. (n.d.). Retrieved from the Government_spending Wiki: http://en.wikipedia.org/wiki/Government_spending Gujarati, D,. N. (2006). Essentials of econometrics. Singapore: The McGraw-Hill Companies, Inc. Hassan Haji Ali. (2001). Ekonometrik asas. Sintok: Universiti Utara Malaysia. Hafizah Hammad Ahmad Khan. (2009). An empirical analysis of savings determinants in Malaysia. Unpublished master’s thesis, Northern University of Malaysia, Sintok. Hsieh, E. & Lai, K,. S. (1994). Government spending and economic growth: The G-7 experience. Journal of Business and Economics, 26, 535-542. Ima Ibrahim. (2009). Pelaburan langsung asing di Malaysia (PLA): Faktor–faktor yang mempengaruhi pelaburan langsung asing. Unpublished master’s thesis, National University of Malaysia, Bangi, Selangor. Import-export-malaysia. (n.d.). In Articlebase Free Online Articles Directory. Retrieved from : http://www.articlesbase.com/ask-an-expert-articles/import-export-malaysia-999308.html Izani Ibrahim. (2002). On exports and economic growth. Jurnal Pengurusan, 21, 13-18. Katerina, L., John. P., & Athanasios, V. (2004). Foreign direct investment and economic growth in transition economies. South Eastern Europe Journal of Economics 1, 97- 110. Khaled R. M. Elbeydi, Abdulbaset M. Hamuda, & Vladimir Gazda. (2010). The relationship between export and economic growth in Libya Arab Jamahiriya. Theoretical and Applied Economics, 1(542), 69-76. Lagrange_multipliers. (n.d.). Retrieved from the Lagrange_multipliers Wiki: http://en.wikipedia.org/wiki/ Lagrange_multipliers Liwan, A. & Lau, E. (2007). Managing growth: The role of export, inflation and investment in three ASEAN neighboring countries. Journal of Economics and Business. Retrieved from http://mpra.ub.uni-muenchen.de/3952/ Macroeconomics. (n.d.). In Answers.com online. Retrieved from http://www.answers.com/topic/macroeconomics Malaysia unemployment rate. (2010). Retrieved 2010 from http://www.indexmundi.com/malaysia/unemployment_rate.html Malaysian Industrial Development Authority. http://www.mida.gov.my Malaysian Industrial Development Finance Berhad. http://www.midf.com.my Malaysia labor.(n.d.). In Encyclopædia of the nations online. Retrieved from http://www.nationsencyclopedia.com/ Asia-andOceania/MalaysiaLABOR. html#ixzz1083cKv9T Maneschiold, P. O. (2008). A note on the export-led growth hypothesis :A time series approach. Journal of Economics, 45, 293-302. Md Zyadi Md Tahir. (1995). Pengenalan perbelanjaan awam. Kuala Lumpur: Dewan Bahasa dan Pustaka. Ming, Y. C. & Hui B. T. (2002). Inflation in Malaysia. International Journal of Social Economics, 29(5), 411-425. Ministry of Finance. www.mof.gov.my Ministry of International Trade and Industry. www.miti.gov.my Min Li. (2006). Inflation and economic growth : Threshold effects and transmission mechanisms. Journal of Economics. Retrieved from economics.ca/2006/papers/0176.pdf Mohammad Affendy Arip, Lau S. Y., & Bakri Abdul Karim, (2010). Export diversification and economic growth in Malaysia. MPRA, 20588. Retrieved from http://mpra.ub.uni-muenchen.de/20588/ Mohd Hasmawy Che Mat Nor. (2009). Government expenditure and output: The case of Malaysia. Unpublished master’s thesis, Northern University of Malaysia, Sintok. Monetary_policy. (n.d.). Retrieved from the Monetary_policy Wiki: http://en.wikipedia.org/wiki/Monetary_policy Mundell, R. (1963). Inflation and Real Interest. Journal of Political Economy, 71(3): 280–283. Nair, R. U. & Weinhold, D. (2001). Causality tests for cross country panels: New look at FDI and economic growth in developing countries. Oxford Buletin of Economics and Statistics, 63(2), 153–171. Nik Suriati Nik Hassan. (2007). Inflasi dan KDNK: Satu kajian empirikal. Unpublished master’s thesis, Northern University of Malaysia, Sintok. Norain Mod Asri, Md. Zyadi Md. Tahir, & Wook Endut, (2010). Komposisi perbelanjaan kerajaan dan pertumbuhan ekonomi: Kajian empirikal di Malaysia. Jurnal Kemanusiaan. Retreived from http://www.fppsm.utm.my/download/doc_view/251-komposisi -perbelanjaan-kerajaan-dan-pertumbuhan-ekonomi-kajian-empiri kal-di-malaysia.html Norehan Abdullah & Nor’aznin Abu Bakar, (n.d.). Hubungan antara fertiliti, penyertaan tenaga buruh wanita dan pendidikan: Kes Malaysia. Unpublished master’s thesis, Northern University of Malaysia, Sintok. Normality_test. (n.d.). Retrieved from the Normality_test Wiki: http://en.wikipedia.org/wiki/Normality_test Panduan pengguna. (2nd ed.). Inflasi. Retrieved 17 September 2010, from http://www.sabah.org.my/bm/konsumer/ panduan_pengguna/inflasi.asp Sjoberg, P. (2003). Government expenditures effect on economic growth: The case of Sweden, 1960-2001. Unpublished master’s thesis, Lulea University of Technology, Sweden. Rizaudin Sahlan. (2010). Ekonometrik: Teori dan aplikasi. Malaysia. Cengage Learning Asia Pte Ltd. Sayed Hossain. (2008). Econometrics modeling. Retrieved 10 October 2010, from www.sayedhossain.com/files/Econometrics. FAQ.pdf Seth, A. (2007). Granger causality. 2(7):1667. University of Sussex, UK: Scholarpedia website. Suleman D., S. Khurram Arslan Wasti, Irfan Lal., & Adnan Hussain. (2009). An empirical investigation between money supply, government expenditure, output & prices: The Pakistan evidence. European Journal of Economics, Finance and Administrative Sciences, 17. Total labor force in Malaysia. (2011). Retrieved February, 24, 2011, from http://www.tradingeconomics.com/malaysia/labor-force-total-wb-data.html Malaysia economic statistics and indicators. (2010). Retrieved September, 28, 2010 from http://www.economywatch.com/economic-statistics/country/ Malaysia/ tutor2u.net. Objectives of government macroeconomic policy [PDF document]. Retrieved from Lecture Notes Online Web site: http://tutor2u.net/economics/content/topics/macroecono my/government_policy.html Vikesh Gokal & Subrina Hanif. (2004). Relationship between inflation and economic growth. Retrieved from http://www.reservebank.gov.fj/docs/2004_04_wp.pdf World Bank www.worldbank.org/ Zulkefly Abdul Karim, Mansor Jusoh, & Norlin Khalid. (2008). The velocity of money in Malaysia: Empirical evidence. International Journal of Management Studies, 17(1), 149-170. Retrieved from http://www.mpra.ub.uni- muenchen.de/26966

Similar Items