Dasar Fiskal Terhadap Perbelanjaan Swasta: Analisis SVAR di Malaysia

Translated title of the contribution: The fiscal policy on private expenditure: A SVAR analysis in Malaysia

Research output: Contribution to journalArticle

Abstract

Starting with a prolonged budget deficit episodes since 1998 in NSM, the government tax revenue collection is unable to cover the expenses. This led the government to think about alternative sources of funding such as issuance of bonds. According to the loanable funds theory, issue government bonds led to decline in bond prices and thus tend to increase market interest rates. The increase in market interest rates tend to the cost of funds increased, which cause the firms respond by shrink the size of the investment. This will further increase in government spending financed through bond issues which couldn't give full effect to increase revenue instead of create a crowding out effect of private investment. This paper aims to investigate the effectiveness of fiscal policy such as government spending shocks dan government revenue shocks on private investment in Malaysia. This study uses a small open economy structural vector autoregressive model to identify the dynamic response of fiscal policy shock on private investment. The data set of this study is quarterly time series spanning from 1991:1-2016:3. Impulse response function (IRF) and variance decomposition (VDC) are used to analyse the effectiveness of fiscal policy on private expenditure. The results indicated that government spending shocks are found to crowd out private investment while for private consumption had a positive effect. For government revenue shocks are found the same results indicated that private investment had a negative effect while for government consumption had a positive effect.

Original languageMalay
Pages (from-to)89-106
Number of pages18
JournalJurnal Ekonomi Malaysia
Volume51
Issue number1
DOIs
Publication statusPublished - 2017

Fingerprint

Expenditure
Private investment
Malaysia
Fiscal policy
Government spending
Government revenue
Government
Interest rates
Tax revenues
Variance decomposition
Bond prices
Government bonds
Expenses
Private consumption
Crowd-out
Dynamic response
Funding
Crowding-out effect
Government consumption
Vector autoregressive model

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)

Cite this

Dasar Fiskal Terhadap Perbelanjaan Swasta : Analisis SVAR di Malaysia. / Kaharudin, Iszan Hana; Abdul Karim, Zulkefly; Zaidi, Mohd Azlan Shah; Ismail, Mohd Adib.

In: Jurnal Ekonomi Malaysia, Vol. 51, No. 1, 2017, p. 89-106.

Research output: Contribution to journalArticle

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