Sustainability of external imbalances: The case of Malaysia
The understanding of the sustainable external imbalances over the 1961-2001 for Malaysia is presented in this paper. The empirical results clearly show that inflows and outflows share a common stochastic trend prior to the 1997 Asian crisis while in the post-crisis period the current account surplus...
| Main Authors: | , |
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| Format: | Article |
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World Scientific
2003
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| Online Access: | http://psasir.upm.edu.my/id/eprint/118899/ |
| _version_ | 1848867817759178752 |
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| author | Lau, Evan Baharumshah, Ahmad Zubaidi |
| author_facet | Lau, Evan Baharumshah, Ahmad Zubaidi |
| author_sort | Lau, Evan |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | The understanding of the sustainable external imbalances over the 1961-2001 for Malaysia is presented in this paper. The empirical results clearly show that inflows and outflows share a common stochastic trend prior to the 1997 Asian crisis while in the post-crisis period the current account surpluses are on an unsustainable path. Our findings highlight the important role of imports (mainly intermediate inputs) in exports. For an economy that depends on export promotion for its growth process, imports are important in restoring external imbalances to its sustainable steady state path. As illustrated by the recent crisis, the large depreciation of the ringgit contributed to a decline in imports and for an economy that is highly dependent on imported capital, this means an economic slowdown. |
| first_indexed | 2025-11-15T14:42:32Z |
| format | Article |
| id | upm-118899 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-15T14:42:32Z |
| publishDate | 2003 |
| publisher | World Scientific |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1188992025-07-29T03:43:25Z http://psasir.upm.edu.my/id/eprint/118899/ Sustainability of external imbalances: The case of Malaysia Lau, Evan Baharumshah, Ahmad Zubaidi The understanding of the sustainable external imbalances over the 1961-2001 for Malaysia is presented in this paper. The empirical results clearly show that inflows and outflows share a common stochastic trend prior to the 1997 Asian crisis while in the post-crisis period the current account surpluses are on an unsustainable path. Our findings highlight the important role of imports (mainly intermediate inputs) in exports. For an economy that depends on export promotion for its growth process, imports are important in restoring external imbalances to its sustainable steady state path. As illustrated by the recent crisis, the large depreciation of the ringgit contributed to a decline in imports and for an economy that is highly dependent on imported capital, this means an economic slowdown. World Scientific 2003 Article PeerReviewed Lau, Evan and Baharumshah, Ahmad Zubaidi (2003) Sustainability of external imbalances: The case of Malaysia. Singapore Economic Review, 48 (1). pp. 61-80. ISSN 0217-5908; eISSN: 0217-5908 https://www.worldscientific.com/doi/abs/10.1142/S0217590803000591 10.1142/S0217590803000591 |
| spellingShingle | Lau, Evan Baharumshah, Ahmad Zubaidi Sustainability of external imbalances: The case of Malaysia |
| title | Sustainability of external imbalances: The case of Malaysia |
| title_full | Sustainability of external imbalances: The case of Malaysia |
| title_fullStr | Sustainability of external imbalances: The case of Malaysia |
| title_full_unstemmed | Sustainability of external imbalances: The case of Malaysia |
| title_short | Sustainability of external imbalances: The case of Malaysia |
| title_sort | sustainability of external imbalances: the case of malaysia |
| url | http://psasir.upm.edu.my/id/eprint/118899/ http://psasir.upm.edu.my/id/eprint/118899/ http://psasir.upm.edu.my/id/eprint/118899/ |