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The Effects Of Disaggregated Savings On Economic Growth In Malaysia - Generalised Variance Decomposition Analysis

  • Chor Foon Tang
  • Hooi Hooi Lean

This study examines how much of the variance in economic growth can be explained by various categories of domestic and foreign savings in Malaysia. The bounds testing approach to cointegration and the generalised forecast error variance decomposition technique was used to achieve the objective of this study. The cointegration test results demonstrate that the relationship between economic growth and savings in Malaysia are stable and coalescing in the long run. The variance decomposition finding indicates that economic growth in Malaysia is dominated by domestic savings such as private and public savings. However, the effect of foreign savings on economic growth is relatively insignificant.

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Paper provided by Monash University, Department of Economics in its series Development Research Unit Working Paper Series with number 04-09.

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Length: 14 pages
Date of creation: 02 Mar 2009
Date of revision:
Handle: RePEc:mos:druwps:2009-04
Contact details of provider: Postal: Department of Economics, Monash University, Victoria 3800, Australia
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