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Estimating the permanent growth effects of financial liberalization: The case of Malaysia

Author

Listed:
  • Rao, B. Bhaskara

Abstract

We argue that the specifications used to estimate the permanent growth effects of reforms in the financial sector are unsatisfactory. Using a modified specification and data for the period 1970 to 2004, we show developments in the financial sector in Malaysia have a small but significant permanent effect on the growth of output. Our results are different from the conclusions in a recent work on this topic.

Suggested Citation

  • Rao, B. Bhaskara, 2008. "Estimating the permanent growth effects of financial liberalization: The case of Malaysia," MPRA Paper 8278, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:8278
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    File URL: https://mpra.ub.uni-muenchen.de/8278/1/MPRA_paper_8278.pdf
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    References listed on IDEAS

    as
    1. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    2. Ang, James B. & McKibbin, Warwick J., 2007. "Financial liberalization, financial sector development and growth: Evidence from Malaysia," Journal of Development Economics, Elsevier, vol. 84(1), pages 215-233, September.
    3. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Growth effects of financial development; Solow model; Malaysia;

    JEL classification:

    • F49 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Other
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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