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Malaysia: from economic recovery to sustained economic growth

Marwan Abdul-Malik Thanoon, Ahmad Zubaidi Baharumshah () and Abd. Aziz Abd. Rahman

Journal of Post Keynesian Economics, 2005, vol. 28, issue 2, 295-315

Abstract: This paper presents an internally consistent macroeconomic framework that could be used as a first step toward a more comprehensive quantitative and qualitative assessment of the adjustment alternatives facing Malaysia. An open economy model is developed to identify which of the gaps--savings, foreign exchange, and fiscal--become the binding constraints in the adjustment process of Malaysia as it strives to sustain economic growth in the postcrisis era. Using 1995 as a base year, the model is simulated over the short and medium terms to demonstrate a sharp trade-off between investment (economic growth) and capacity utilization under foreign exchange constraints.

Date: 2005
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