Government Intervention in the Economy-Test on Malaysia's Fiscal Conduct

Evan, Lau and Shazali, Abu Mansor and Puah, Chin Hong (2006) Government Intervention in the Economy-Test on Malaysia's Fiscal Conduct. The Asia Pacific Journal of Economics & Business, 10 (2). ISSN 1326-8481

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Using Malaysia as a case study, this paper investigates the conduct of fiscal policy regimes during the last three decades. Empirical results show that in pre-crisis Malaysia the fiscal stance is not sustainable, while in the full sampling period (including the post-1997 crisis era) it satisfies only the necessary condition for sustainability. Long-run oneway causation from expenditure to revenue was observed, in line with the spend-and-tax hypothesis. The Malaysian government, therefore, must aim to reduce the size of government spending and promote a costeffective expenditure program with maximum benefits, to moderate the post-crisis fiscal imbalances

Item Type: Article
Uncontrolled Keywords: Studies; Intervention, Fiscal policy; Causality; Emerging markets; Sustainability, research, Universiti Malaysia Sarawak, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Faculties, Institutes, Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 28 Aug 2017 06:33
Last Modified: 28 Aug 2017 06:33

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