The Role of Macroeconomic Fundamentals in Malaysian Post Recession Growth

This study aims to find out the role of macroeconomic fundamentals in Malaysian post recession growth. The selected macroeconomic variables are exports, imports, price level, money supply, interest rate, exchange rate and government expenditure. The technique of cointegration was employed to assess the long run equilibrium relationships among the variables. Then, this study performs the Granger causality tests based on VECM to establish the short run causality among the variables. The long-run cointegrating relationship shown that an increase in exports, government expenditure or depreciation of exchange rate will promote long-term economic growth while increase in inflation, interest rate and imports will tamper the Malaysian economic growth. The results of short-run Granger-causality indicated that price level and government spending Granger-caused economic growth in the short-run. In conclusion, based on the results of long-run and short run analysis, the fiscal policy is probably the most appropriate tool in promoting economic growth in Malaysia during the post recession period

Volatility spillover and dynamic co-movement of foreign direct investment between Malaysia and China and developed countries

This study delves into the relationship between Malaysia and several countries—China, Singapore, Japan and the United States of America (USA), through FDI relations using the multivariate GARCH model. The annual time series data was used over the period of 1982 to 2017. The study was able to prove statistically, of a significant volatility spillover between Malaysia and China, Singapore, Japan and the USA. The study also found that the relationship between FDI for all these countries varied over time, which was dynamic in nature. Relatively low (weak) correlations occurred between Malaysia and Singapore and Japan, while high (strong) correlations occurred between Malaysia and China and the USA. In addition, the finding also showed that although there was evidence due to significant impacts, both the Asian financial crisis and the global financial crisis did not entirely affect the market trends and the relationship between foreign direct investments across all these countries

Macroeconomic variables and Malaysia house price

Malaysia is one of the developing countries that facing an upward trend in demand for housing. However, the increasing trend in housing prices has become worrying. This study aims to examine the macroeconomic determinants of the housing price in Malaysia. The house price index and macroeconomic data on gross domestic products growth, consumer price index and money supply were collected based on quarterly basis over the period from 2000 to 2019. The Autoregressive Distributed Lag (ARDL) model was used to investigate the effects of long-run and short-run estimates of the proposed econometric model based on the selected macroeconomic variables mention above. The results from the Augmented Dickey-Fuller and Phillips-Perron tests of stationarity indicated that all the variables were non-stationary at the level, I(0) but stationary at the first difference, I(1). The long-run coefficient estimates showed that the gross domestic product and money supply are significant and positively influenced the house price index in Malaysia. In addition, the consumer price index was also significant, but has negative relationship with the house price index in the long run. Further analysis using causality tests revealed that statistically only gross domestic product and money supply were found significant in influencing the house price index in the short-run