IDEAS home Printed from https://ideas.repec.org/a/rnd/arimbr/v9y2017i2p6-15.html
   My bibliography  Save this article

Examining the Linkage between Poverty and Macroeconomic Variables in Malaysia: A Co-integration Analysis

Author

Listed:
  • Gurmit Kaur
  • Siti Ayu Jalil

Abstract

The purpose of this paper is to examine the linkage between the macroeconomic variables i.e. gross domestic product per capita (GDP), unemployment (UNE), tourist receipts (TOU), consumer price index (CPI) and poverty rate (POV) in Malaysia from 1969-2014. The econometric techniques used are unit root test and the Johansen Cointegration. The Granger Causality test using Block Exogeneity Wald test was added to analyze the causal relationships between the variables. The unit root test showed that all variables were stationary at first difference and thus the Johansen Co-integration test is an appropriate technique to employ. The evidence from co-integration test indicates that all the five series have three (3) co-integrating equations and significance at 1 percent level of significance. The causality test indicated there is a significant unidirectional causality between POV on GDP, CPI on POV, POV on TOU, GDP on UNE, GDP on TOU and CPI on TOU and bidirectional causality between POV and UNE. This paper is possibly the first to discuss these relationships in Malaysian context using Co-integration analysis. The finding implies that poverty is the key issue that should be addressed to achieve a high-income country status in the year 2020.

Suggested Citation

  • Gurmit Kaur & Siti Ayu Jalil, 2017. "Examining the Linkage between Poverty and Macroeconomic Variables in Malaysia: A Co-integration Analysis," Information Management and Business Review, AMH International, vol. 9(2), pages 6-15.
    • Handle: RePEc:rnd:arimbr:v:9:y:2017:i:2:p:6-15
    DOI: 10.22610/imbr.v9i2.1718
    as

    Download full text from publisher

    File URL: https://ojs.amhinternational.com/index.php/imbr/article/view/1718/1435
    Download Restriction: no
    File URL: https://ojs.amhinternational.com/index.php/imbr/article/view/1718
    Download Restriction: no
    File URL: https://libkey.io/10.22610/imbr.v9i2.1718?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Elizabeth T. Powers, 1995. "Inflation, unemployment, and poverty revisited," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 2-13.
    2. Ravallion, Martin, 1997. "Can high-inequality developing countries escape absolute poverty?," Economics Letters, Elsevier, vol. 56(1), pages 51-57, September.
    3. Ansgar Belke & Andreas Wernet, 2015. "Poverty Reduction through Growth and Redistribution Policies—a Panel Analysis for 59 Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 143-162, February.
    4. T. O. Akinbobola & M. O. O. Saibu, 2004. "Income inequality, unemployment, and poverty in Nigeria: a vector autoregressive approach," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(3), pages 175-183.
    5. Pernia, Ernesto & Kakwani, Nanak, 2000. "What is Pro-poor Growth?," MPRA Paper 104987, University Library of Munich, Germany.
    6. Ang, James B., 2008. "Economic development, pollutant emissions and energy consumption in Malaysia," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 271-278.
    7. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
    8. Easterly, William & Fischer, Stanley, 2001. "Inflation and the Poor," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 160-178, May.
    9. Sulochana Nair & S. Sagaran, 2015. "Poverty in Malaysia: Need for a Paradigm Shift," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 7(3), pages 95-123, October.
    10. Chiara Amini & Silvia Dal Bianco, 2016. "Poverty, growth, inequality and pro-poor factors: new evidence from macro data," Journal of Developing Areas, Tennessee State University, College of Business, vol. 50(2), pages 231-254, April-Jun.
    11. Melville Saayman & Riaan Rossouw & Waldo Krugell, 2012. "The impact of tourism on poverty in South Africa," Development Southern Africa, Taylor & Francis Journals, vol. 29(3), pages 462-487, September.
    12. Robert H. DeFina, 2002. "Does lower unemployment reduce poverty?," Business Review, Federal Reserve Bank of Philadelphia, issue Q3, pages 34-41.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John Anyanwu, 2013. "Working Paper 181 - Determining the Correlates of Poverty for Inclusive Growth in Africa," Working Paper Series 979, African Development Bank.
    2. Kraay, Aart, 2004. "When is growth pro-poor? Cross-country evidence," Policy Research Working Paper Series 3225, The World Bank.
    3. Yerrabati, Sridevi, 2022. "Does vulnerable employment alleviate poverty in developing countries?," Economic Modelling, Elsevier, vol. 116(C).
    4. William Easterly, 2001. "The Effect of IMF and World Bank Programmes on Poverty," WIDER Working Paper Series DP2001-102, World Institute for Development Economic Research (UNU-WIDER).
    5. Ademola Obafemi Young, 2019. "Growth Impacts of Income Inequality: Empirical Evidence From Nigeria," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 226-262, December.
    6. Shah Imtiyaz Ahmad & Haq Imtiyaz ul, 2022. "The Impact of Tourism Development and Economic Growth on Poverty Reduction in Kazakhstan," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 10(1), pages 77-90, September.
    7. Javier Cossío Medinacelli & Marco Antonio Laguna Vargas & Dennise Martin Alarcón & Pablo Mendieta Ossio & Raúl Mendoza Patiño & Martín Palmero Pantoja & Hugo Rodríguez Gonzales, 2008. "La inflación y políticas del Banco Central de Bolivia," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 10(1), pages 73-109, December.
    8. Cuong V. Nguyen & Nguyet M. Pham, 2018. "Economic growth, inequality, and poverty in Vietnam," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 32(1), pages 45-58, May.
    9. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    10. Bonilla, Eugenio Diaz, 2008. "Global macroeconomic developments and poverty:," IFPRI discussion papers 766, International Food Policy Research Institute (IFPRI).
    11. Ms. Caroline M Kende-Robb, 2003. "Poverty and Social Impact Analysis: Linking Macroeconomic Policies to Poverty Outcomes: Summary of Early Experiences," IMF Working Papers 2003/043, International Monetary Fund.
    12. Kraay, Aart, 2006. "When is growth pro-poor? Evidence from a panel of countries," Journal of Development Economics, Elsevier, vol. 80(1), pages 198-227, June.
    13. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    14. Prados de la Escosura, Leandro, 2005. "Growth, inequality, and poverty in Latin America: historical evidence, controlled conjectures," IFCS - Working Papers in Economic History.WH wh054104, Universidad Carlos III de Madrid. Instituto Figuerola.
    15. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    16. Guillermo E. Perry & Omar S. Arias & J. Humberto López & William F. Maloney & Luis Servén, 2006. "Poverty Reduction and Growth : Virtuous and Vicious Circles," World Bank Publications - Books, The World Bank Group, number 6997, December.
    17. Sabyasachi Tripathi, 2013. "Is Urban Economic Growth Inclusive in India?," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 7(4), pages 507-539, November.
    18. Motkuri, Venkatanarayana, 2013. "Scheduled Castes (SCs) and Tribes (STs) in Andhra Pradesh: A Situation Assessment Analysis," MPRA Paper 48186, University Library of Munich, Germany.
    19. Lahimer, Noomen, 2009. "La contribution des investissements directs étrangers à la réduction de la pauvreté en Afrique subsaharienne," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/1167 edited by Goaied, Mohamed & Bienaymé, Alain.
    20. Robertico Croes & Manuel A. Rivera, 2017. "Tourism’s potential to benefit the poor," Tourism Economics, , vol. 23(1), pages 29-48, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rnd:arimbr:v:9:y:2017:i:2:p:6-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Muhammad Tayyab (email available below). General contact details of provider: https://ojs.amhinternational.com/index.php/imbr .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.