Reactions of Long-run Private Consumption in Malaysia to Crises, Economic Leadership and Telecommunication Technology

Chor Foon Tang and Yu Syuen Lim ()
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Yu Syuen Lim: Centre for Policy Research and International Studies, Universiti Sains Malaysia

Malaysian Journal of Economic Studies, 2022, vol. 59, issue 2, 221-239

Abstract: We estimate the long-run reactions of private consumption in Malaysia to crises, economic leadership, information and communications technology (ICT), and other key determinants using time series econometrics. This study covers the quarterly sample from 1990:Q1 to 2020:Q4. We find that Malaysia’s private consumption and its key determinants are cointegrated, demonstrating that a reliable long-run private consumption function can be estimated. We find that both economic and health crises, namely the Asian financial crisis in 1997/98, SARS and COVID-19 pandemic are likely to reduce private consumption in Malaysia. However, the long-run estimation results show that ICT and economic leadership are positively related to consumption. Therefore, policymakers should set the goal of encouraging the development of ICT infrastructure and good economic leadership in order to promote private consumption, which eventually sustains long-term economic growth and development.

Keywords: COVID-19; cointegration; economic leadership; Malaysia; private consumption (search for similar items in EconPapers)
JEL-codes: C22 E21 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:59:y:2022:i:2:p:221-239

DOI: 10.22452/MJES.vol59no2.3

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