Author : M. Shabri Abd. Majid
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis Re-Examining the Finance-Growth Nexus in Malaysia and Indonesia by : M. Shabri Abd. Majid
Download or read book Re-Examining the Finance-Growth Nexus in Malaysia and Indonesia written by M. Shabri Abd. Majid and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: By employing a battery of time-series techniques, the paper empirically examines the short- and long-run finance-growth nexus during the post-1997 financial turmoil in Malaysia and Indonesia. Based on the Autoregressive Distributed Lag (ARDL) models, the study documents a long-run equilibrium between economic growth, finance depth and inflation. Granger causality tests based on the Vector Error Correction Model (VECM) further reveal that there are: (1) No causality between finance and growth in Indonesia, which accords with the independent hypothesis of Lucas (1988); and (2) A unidirectional causality running from finance to growth in Malaysia, thus supporting the finance-growth led hypothesis or the supply-leading view. Based on the Impulse-Response Functions (IRFs), the study discovers that the variations in the economic growth rely very much on economic innovations.