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How Stable is the Savings-led Growth Hypothesis in Malaysia? The Bootstrap Simulation and Recursive Causality Tests

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  • Chor Foon Tang

    (The author is at the Centre for Policy Research and International Studies, Universiti Sains Malaysia, 11800 USM, Penang, Malaysia, emails: tcfoon@usm.my or tcfoon@gmail.com)

Abstract

The purpose of this study is to empirically investigate the vindication of the savings-led growth hypothesis for the Malaysian economy with the long-run TYDL version of the Granger causality test—Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996). This study used the quarterly sample from 1970:Q1 to 2008:Q4. The recursive regression procedure will also incorporate into the TYDL causality test to measure the stability of the savings-led growth hypothesis in the long-run. Our empirical results support that the savings-led growth hypothesis is a long-run phenomenon and stable over time. Therefore, the Malaysian dataset supports the endogenous growth theory. JEL Classification: C22, E21, O16

Suggested Citation

  • Chor Foon Tang, 2015. "How Stable is the Savings-led Growth Hypothesis in Malaysia? The Bootstrap Simulation and Recursive Causality Tests," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 9(1), pages 1-17, February.
    • Handle: RePEc:sae:mareco:v:9:y:2015:i:1:p:1-17
    DOI: 10.1177/0973801014557393
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    References listed on IDEAS

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    More about this item

    Keywords

    Causality; Malaysia; Recursive regression; Savings-led growth; Stability;
    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
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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