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Assessment of the global financial crisis effects on energy consumption and economic growth in Malaysia: An input–output analysis

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  • Hussain Ali Bekhet
  • Tahira Yasmin

Abstract

During the last three decades, dependence on foreign trade has increased sharply in Malaysia, causing the Malaysian economy to become increasingly export-oriented. The global financial crisis (GFC) affected Malaysia?s economic growth tremendously in the fourth quarter of 2008, and policy makers subsequently adopted effective measures to avoid future crises. The government unveiled two stimulus packages; the first—totalling RM7 billion (US$1.9 billion), accounting for 1.04% of the GDP—was launched in November 2008 while the second—totalling RM60 billion (US$16.2 billion), or 9% of the GDP—was launched in March 2009. The objectives of this paper are to (1) discuss the influence of the GFC on Malaysia?s trade and energy consumption and (2) analyse the effect of the Malaysian government?s stimulus plans for economic revival using an input–output model. The results indicate that the drop in exports caused by the GFC led to a 13% decrease in GDP and a 16% reduction in energy consumption. The stimulus packages led to 1.83% and 4.64% increases in economic growth and energy consumption, respectively.

Suggested Citation

  • Hussain Ali Bekhet & Tahira Yasmin, 2014. "Assessment of the global financial crisis effects on energy consumption and economic growth in Malaysia: An input–output analysis," International Economics, CEPII research center, issue 140, pages 49-70.
  • Handle: RePEc:cii:cepiie:2014-q4-140-4
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    Cited by:

    1. repec:eco:journ2:2017-04-31 is not listed on IDEAS
    2. Hidemichi Fujii & A. George Assaf & Shunsuke Managi & Roman Matousek, 2016. "Did the financial crisis affect environmental efficiency? evidence from the Japanese manufacturing sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 159-168, April.
    3. repec:eee:rensus:v:79:y:2017:i:c:p:1285-1302 is not listed on IDEAS
    4. ORALHAN Burcu & ALTAY TOPCU Betül & SÜMERLİ SARIGÜL Sevgi, 2016. "Determination Of Key Sectors In Turkish Economy By Using Input-Output Analysis," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 68(1), pages 178-192, June.

    More about this item

    Keywords

    Global financial crisis; Energy consumption; Economic growth; Input–output model; Malaysia;

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G01 - Financial Economics - - General - - - Financial Crises
    • N75 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Asia including Middle East
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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