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Fiscal sustainability in Malaysia: a re-examination

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  • Hui, Hon Chung

Abstract

In this paper, I deploy a broad array of econometric tests to thoroughly examine fiscal sustainability in Malaysia. Results of the multicointegration test suggest the absence of cointegration between the cumulated cointegration errors, real government expenditure and real government revenue. Meanwhile, standard cointegration analyses indicate that the fiscal process fulfills only the weak-form sustainability. Most importantly, results from a fiscal sustainability model which incorporates revenues from oil and gas exports, do not strongly support the view that fiscal process is sustainable. Some policy-implications follow from these findings.

Suggested Citation

  • Hui, Hon Chung, 2013. "Fiscal sustainability in Malaysia: a re-examination," MPRA Paper 80018, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:80018
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    References listed on IDEAS

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    More about this item

    Keywords

    Fiscal sustainability; cointegration; tax-smoothing;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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