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Sources of macroeconomic fluctuations in Malaysia: an empirical test of the Keynesian model

Abdul Manap, Turkhan Ali and Kassim, Salina (2007) Sources of macroeconomic fluctuations in Malaysia: an empirical test of the Keynesian model. Asia Pacific Journal of Economics and Business, 11 (2). pp. 58-77.

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Abstract

Identifying the sources of macroeconomic fluctuations is critical to formulating macroeconomic policies. This paper investigates the sources of macroeconomic fluctuations in Malaysia based on the traditional Keynesian framework, using both the standard VAR and structural VAR methods. The joint behavior of the key macroeconomic variables in Malaysia is shown to be consistent with the dynamic transmission of demand and supply shocks through the mechanisms described in the Keynesian model. Positive supply shocks increase output while negative supply shocks contract output and increase price level. Money supply shocks stimulate output and increase the price level. These results are further supported by a variance decomposition analysis

Item Type: Article (Journal)
Additional Information: 5324/8625
Uncontrolled Keywords: Keynesian, macroeconomic
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HB Economic Theory > HB131 Methodology.Mathematical economics. Quantitative methods
H Social Sciences > HB Economic Theory > HB3711 Business cycles. Economic fluctuations
Kulliyyahs/Centres/Divisions/Institutes: Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User: Dr Turkhan Ali Abdul Manap
Date Deposited: 07 Dec 2011 08:56
Last Modified: 15 Feb 2012 19:45
URI: http://irep.iium.edu.my/id/eprint/8625

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