Title: TEST FOR DYNAMIC RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN MALAYSIA.
Authors: Amiruddin, Rosilawati; Nor, Abu Hassan Shaari Mohd; Ismail, Ismadi
Abstract: This paper purports to study the effectiveness of financial development to Malaysian economic growth utilizing quarterly data. In view of the priority given to dynamic relationship in conducting this study, Vector Autoregressive (VAR) method which encompasses Johansen-Juselius' Multivariate cointegration, Vector Error Correction Model (VECM), Impulse Response Function (IRF), and Variance Decomposition (VDC) are used as empirical evidence. The result reveals a short-term and long-term dynamic relationship between financial development and economic growth. The importance of financial sector in influencing the economic activity is proven as a clear policy implication.
Subjects: MALAYSIA; ECONOMIC development; FINANCE; COINTEGRATION; MULTIVARIATE analysis; FINANCIAL services industry; ECONOMIC activity
Publication: Gadjah Mada International Journal of Business, 2007, Vol 9, Issue 1, p61
ISSN: 1411-1128
Publication type: Academic Journal
DOI: 10.22146/gamaijb.5605

TEST FOR DYNAMIC RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN MALAYSIA.

Amiruddin, Rosilawati; Nor, Abu Hassan Shaari Mohd; Ismail, Ismadi