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

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  • Chor Foon Tang
  • Hooi Hooi Lean

Abstract

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.

Suggested Citation

  • Chor Foon Tang & Hooi Hooi Lean, 2009. "The Effects Of Disaggregated Savings On Economic Growth In Malaysia - Generalised Variance Decomposition Analysis," Development Research Unit Working Paper Series 04-09, Monash University, Department of Economics.
    • Handle: RePEc:mos:druwps:2009-04
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    File URL: http://www.buseco.monash.edu.au/units/dru/papers/working-papers-09/09-04disaggregatedtanglean.pdf
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Cointegration; Disaggregate savings; Growth; Generalised variance decomposition; Malaysia;
    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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