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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.

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Bibliographic Info

Article provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.

Volume (Year): 28 (2006)
Issue (Month): 2 (January)
Pages: 295-315

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Handle: RePEc:mes:postke:v:28:y:2006:i:2:p:295-315

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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348

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Keywords: economic growth; foreign capital; three-gap model;

References

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