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Malaysia: from economic recovery to sustained economic growth

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  • MARWAN ABDUL-MALIK THANOON
  • AHMAD ZUBAIDI BAHARUMSHAH
  • ABD. AZIZ ABD. RAHMAN

Abstract

This paper presents an internally consistent macroeconomic framework that could be used as a first step toward a more comprehensive quantitative and qualitative assessment of the adjustment alternatives facing Malaysia. An open economy model is developed to identify which of the gaps--savings, foreign exchange, and fiscal--become the binding constraints in the adjustment process of Malaysia as it strives to sustain economic growth in the postcrisis era. Using 1995 as a base year, the model is simulated over the short and medium terms to demonstrate a sharp trade-off between investment (economic growth) and capacity utilization under foreign exchange constraints.

Suggested Citation

  • Marwan Abdul-Malik Thanoon & Ahmad Zubaidi Baharumshah & Abd. Aziz Abd. Rahman, 2005. "Malaysia: from economic recovery to sustained economic growth," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 28(2), pages 295-315.
    • Handle: RePEc:mes:postke:v:28:y:2005:i:2:p:295-315
    DOI: 10.2753/PKE0160-3477280207
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