Do Financial Development and Inflation Influences Malaysia Economic Growth? An Application of Bound Test
Journal Title: International Journal of Academic Research in Business and Social Sciences - Year 2018, Vol 8, Issue 1
Abstract
It is generally thought that there is a negative long-term relationship between inflation and growth and a positive long-term relationship between financial development and growth. The existing empirical literature suggests that the finance-growth relationship is more robust than the inflation-growth relationship. This paper empirically examines the short and long run inflation led growth nexus as well as finance led growth nexus during the period ranging from 1985 up to 2010 by using time series technique known as ARDL approach. Besides inflation, we also included other significant variables such as real gross domestic investment, foreign direct investment inflow and openness ratio to border the scope of this research. The findings revealed that inflation led growth nexus is valid for Malaysia and contributed the highest growth towards Malaysia economy as compared to financial development and other selected macroeconomic determinants.
Authors and Affiliations
Abdul Rahim Ridzuan, Muhammad Waqas Khalid, Nur Izzati Zarin, Mohd Idham Md Razak, Abdul Rauf Ridzuan, Irzan Ismail, Norsabrena Norizan
Keywords
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- EP ID EP530139
- DOI 10.6007/IJARBSS/v8-i1/3800
- Views 90
- Downloads 0
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