THE EFFECTS OF DISAGGREGATED SAVINGS ON ECONOMIC GROWTH IN MALAYSIA - GENERALISED VARIANCE DECOMPOSITION ANALYSIS

Chor Foon Tang and Hooi Hooi Lean ()

No 04-09, Development Research Unit Working Paper Series from Monash University, Department of Economics

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.

Keywords: Cointegration; Disaggregate savings; Growth; Generalised variance decomposition; Malaysia (search for similar items in EconPapers)
JEL-codes: C22 E21 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2009-03-02
New Economics Papers: this item is included in nep-fdg and nep-sea
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Citations: View citations in EconPapers (1)

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