The impact of government debt on output, private investment and human capital stock in Malaysia
This paper mainly aims to examine the effect of government debt on real output per capita in a successful developing economy of Malaysia during 1985-2014 period. Using Vector Error Correction modeling (VECM) and employing Generalized Impulse Response (GIR) tool, dynamic response of output per capita...
| Main Authors: | , , |
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| Format: | Conference or Workshop Item |
| Language: | English |
| Published: |
Faculty of Economics and Management, Universiti Putra Malaysia
2017
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| Online Access: | http://psasir.upm.edu.my/id/eprint/58726/ http://psasir.upm.edu.my/id/eprint/58726/1/12-HODA_HAJIAN.pdf.pdf |
| _version_ | 1848853726674026496 |
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| author | Hajian, Hoda Mohamed, Azali Habibullah, Muzafar Shah |
| author_facet | Hajian, Hoda Mohamed, Azali Habibullah, Muzafar Shah |
| author_sort | Hajian, Hoda |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper mainly aims to examine the effect of government debt on real output per capita in a successful developing economy of Malaysia during 1985-2014 period. Using Vector Error Correction modeling (VECM) and employing Generalized Impulse Response (GIR) tool, dynamic response of output per capita to a shock to government debt is obtained. Using the same model, the effect of government debt on economic growth factors, namely, private investment and human capital are also examined. The impulse response result based on VECM model shows that using this sample on average debt does not significantly influence output per capita and private investment although, the later shows negative response. However, human capital positively respond to a debt shock. Overall, this result did not find evidence for crowding out effect of government debt. In other words, the result provide some support for prudent debt management in Malaysia in the past. However, wisely use of government sources is always important. Moreover, excessive borrowing is not advised as it could negate positive effects and jeopardize debt sustainability. |
| first_indexed | 2025-11-15T10:58:33Z |
| format | Conference or Workshop Item |
| id | upm-58726 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T10:58:33Z |
| publishDate | 2017 |
| publisher | Faculty of Economics and Management, Universiti Putra Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-587262018-01-30T09:45:39Z http://psasir.upm.edu.my/id/eprint/58726/ The impact of government debt on output, private investment and human capital stock in Malaysia Hajian, Hoda Mohamed, Azali Habibullah, Muzafar Shah This paper mainly aims to examine the effect of government debt on real output per capita in a successful developing economy of Malaysia during 1985-2014 period. Using Vector Error Correction modeling (VECM) and employing Generalized Impulse Response (GIR) tool, dynamic response of output per capita to a shock to government debt is obtained. Using the same model, the effect of government debt on economic growth factors, namely, private investment and human capital are also examined. The impulse response result based on VECM model shows that using this sample on average debt does not significantly influence output per capita and private investment although, the later shows negative response. However, human capital positively respond to a debt shock. Overall, this result did not find evidence for crowding out effect of government debt. In other words, the result provide some support for prudent debt management in Malaysia in the past. However, wisely use of government sources is always important. Moreover, excessive borrowing is not advised as it could negate positive effects and jeopardize debt sustainability. Faculty of Economics and Management, Universiti Putra Malaysia 2017 Conference or Workshop Item PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/58726/1/12-HODA_HAJIAN.pdf.pdf Hajian, Hoda and Mohamed, Azali and Habibullah, Muzafar Shah (2017) The impact of government debt on output, private investment and human capital stock in Malaysia. In: Global Conference on Business and Economics Research (GCBER) 2017, 14-15 Aug. 2017, Universiti Putra Malaysia, Serdang, Selangor. (pp. 258-264). http://www.econ.upm.edu.my/upload/dokumen/20170818182324032-HODA_HAJIAN.pdf.pdf |
| spellingShingle | Hajian, Hoda Mohamed, Azali Habibullah, Muzafar Shah The impact of government debt on output, private investment and human capital stock in Malaysia |
| title | The impact of government debt on output, private investment and human capital stock in Malaysia |
| title_full | The impact of government debt on output, private investment and human capital stock in Malaysia |
| title_fullStr | The impact of government debt on output, private investment and human capital stock in Malaysia |
| title_full_unstemmed | The impact of government debt on output, private investment and human capital stock in Malaysia |
| title_short | The impact of government debt on output, private investment and human capital stock in Malaysia |
| title_sort | impact of government debt on output, private investment and human capital stock in malaysia |
| url | http://psasir.upm.edu.my/id/eprint/58726/ http://psasir.upm.edu.my/id/eprint/58726/ http://psasir.upm.edu.my/id/eprint/58726/1/12-HODA_HAJIAN.pdf.pdf |