Fiscal sustainability in Malaysia: a re-examination

Hon Chung Hui

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, I deploy a broad array of econometric tests to thoroughly examine fiscal sustainability in Malaysia. Results of the multicointegration test suggest the absence of cointegration between the cumulated cointegration errors, real government expenditure and real government revenue. Meanwhile, standard cointegration analyses indicate that the fiscal process fulfills only the weak-form sustainability. Most importantly, results from a fiscal sustainability model which incorporates revenues from oil and gas exports, do not strongly support the view that fiscal process is sustainable. Some policy-implications follow from these findings.

Keywords: Fiscal sustainability; cointegration; tax-smoothing (search for similar items in EconPapers)
JEL-codes: C1 H2 H63 (search for similar items in EconPapers)
Date: 2013-02-01
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