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Long-Term Growth in Malaysia: An Application of Endogenous Neoclassical Growth Model

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  • Ismail, Rahmah

    (Fakulti Ekonomi Universiti Kebangsaan Malaysia 43600 UKM 8angi Selangor Darul Ehsan)

Abstract

The neoclassical growth model shows that the growth of output is not determined by fhe saving rate, but it is constrained by the rate of growth of the labour force. Therefore, in order to increase the output growth higher than that of the labour force, factors other than the saving rate like technology and labour productivity must be improved. This article attempts to test this model in the Malaysia’s growth experience using data of 1970-1996. The finding from this study shows that the Malaysia’s experience is in accordance will the neoclassical growth model postulation that is saving rate does not significantly determine the rate of output growth. Instead, it is determined by the growth of export, population and goverment expenditure on education. However level of saving is crucial in determining level of output.

Suggested Citation

  • Ismail, Rahmah, 1999. "Long-Term Growth in Malaysia: An Application of Endogenous Neoclassical Growth Model," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 33, pages 105-121.
    • Handle: RePEc:ukm:jlekon:v:33:y:1999:i::p:105-121
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    References listed on IDEAS

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    3. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    4. Otani, Ichiro & Villanueva, Delano, 1990. "Long-term growth in developing countries and its determinants: An empirical analysis," World Development, Elsevier, vol. 18(6), pages 769-783, June.
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