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Reactions of Long-run Private Consumption in Malaysia to Crises, Economic Leadership and Telecommunication Technology

Author

Listed:
  • Chor Foon Tang

    (Centre for Policy Research and International Studies, Universiti Sains Malaysia)

  • Yu Syuen Lim

    (Centre for Policy Research and International Studies, Universiti Sains Malaysia)

Abstract

We estimate the long-run reactions of private consumption in Malaysia to crises, economic leadership, information and communications technology (ICT), and other key determinants using time series econometrics. This study covers the quarterly sample from 1990:Q1 to 2020:Q4. We find that Malaysia’s private consumption and its key determinants are cointegrated, demonstrating that a reliable long-run private consumption function can be estimated. We find that both economic and health crises, namely the Asian financial crisis in 1997/98, SARS and COVID-19 pandemic are likely to reduce private consumption in Malaysia. However, the long-run estimation results show that ICT and economic leadership are positively related to consumption. Therefore, policymakers should set the goal of encouraging the development of ICT infrastructure and good economic leadership in order to promote private consumption, which eventually sustains long-term economic growth and development.

Suggested Citation

  • Chor Foon Tang & Yu Syuen Lim, 2022. "Reactions of Long-run Private Consumption in Malaysia to Crises, Economic Leadership and Telecommunication Technology," Malaysian Journal of Economic Studies, Faculty of Business and Economics, University of Malaya & Malaysian Economic Association, vol. 59(2), pages 221-239, December.
    • Handle: RePEc:mjr:journl:v:59:y:2022:i:2:p:221-239
    DOI: 10.22452/MJES.vol59no2.3
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    More about this item

    Keywords

    COVID-19; cointegration; economic leadership; Malaysia; private consumption;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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