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The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia

The panic wrought by the 1997 Asian financial crisis spurred different mitigative measures. Some states assented to IMF bailout and restructuring, while others enforced capital control. Since then, despite intense academic and regulatory scrutiny of the nuances of the recession, empiric focus on rec...

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Main Authors: Mohamad, Azhar, Hashim, Mastura, Sifat, Imtiaz Mohamma
Format: Article
Language:English
English
English
Published: Elsevier Ltd 2019
Subjects:
HB846 Welfare theory
Online Access:http://irep.iium.edu.my/73404/1/73404_The%20sustainable%20development%20consequences%20of%20IMF.pdf
http://irep.iium.edu.my/73404/2/73404_The%20sustainable%20development%20consequences%20of%20IMF_SCOPUS.pdf
http://irep.iium.edu.my/73404/13/73404_The%20sustainable%20development%20consequences%20of%20IMF%20debt_wos.pdf
http://irep.iium.edu.my/73404/
https://www.sciencedirect.com/science/article/pii/S0959652619320980
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spelling my.iium.irep.734042020-09-08T08:55:47Z http://irep.iium.edu.my/73404/ The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia Mohamad, Azhar Hashim, Mastura Sifat, Imtiaz Mohamma HB846 Welfare theory The panic wrought by the 1997 Asian financial crisis spurred different mitigative measures. Some states assented to IMF bailout and restructuring, while others enforced capital control. Since then, despite intense academic and regulatory scrutiny of the nuances of the recession, empiric focus on recovery trajectory of affected countries centred chiefly around traditional GDP metrics; an approach that disregards economic performance in a manner congruent with Sustainable Development Goals (SDG). In this paper, we adopt a broader SDG-compatible approach by tracking two affected countries’ (Korea and Malaysia) recovery via operationalizing an alternative growth indicator GPI (Genuine Progress Indicator). First, we construct a 35-year long GPI index from 1980 to 2014 and employ the Solow Growth Model to measure the impact of the two remedial measures on GDP and GPI of both countries. Employing an ARDL approach, we find external debt to impact significantly the GDP and GPI of Korea. Meanwhile for Malaysia, the controversial capital control failed to register significant impact. Moreover, unemployment rates, trade openness, fixed capital formation and the history of previous crises are found to be influential determinants of GDP and GPI, with credit and exchange rate variables showing ambiguous results. Elsevier Ltd 2019-10-10 Article PeerReviewed application/pdf en http://irep.iium.edu.my/73404/1/73404_The%20sustainable%20development%20consequences%20of%20IMF.pdf application/pdf en http://irep.iium.edu.my/73404/2/73404_The%20sustainable%20development%20consequences%20of%20IMF_SCOPUS.pdf application/pdf en http://irep.iium.edu.my/73404/13/73404_The%20sustainable%20development%20consequences%20of%20IMF%20debt_wos.pdf Mohamad, Azhar and Hashim, Mastura and Sifat, Imtiaz Mohamma (2019) The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia. Journal of Cleaner Production, 234 (1). pp. 725-742. ISSN 0959-6526 https://www.sciencedirect.com/science/article/pii/S0959652619320980 10.1016/j.jclepro.2019.06.144
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
English
English
topic HB846 Welfare theory
spellingShingle HB846 Welfare theory
Mohamad, Azhar
Hashim, Mastura
Sifat, Imtiaz Mohamma
The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
description The panic wrought by the 1997 Asian financial crisis spurred different mitigative measures. Some states assented to IMF bailout and restructuring, while others enforced capital control. Since then, despite intense academic and regulatory scrutiny of the nuances of the recession, empiric focus on recovery trajectory of affected countries centred chiefly around traditional GDP metrics; an approach that disregards economic performance in a manner congruent with Sustainable Development Goals (SDG). In this paper, we adopt a broader SDG-compatible approach by tracking two affected countries’ (Korea and Malaysia) recovery via operationalizing an alternative growth indicator GPI (Genuine Progress Indicator). First, we construct a 35-year long GPI index from 1980 to 2014 and employ the Solow Growth Model to measure the impact of the two remedial measures on GDP and GPI of both countries. Employing an ARDL approach, we find external debt to impact significantly the GDP and GPI of Korea. Meanwhile for Malaysia, the controversial capital control failed to register significant impact. Moreover, unemployment rates, trade openness, fixed capital formation and the history of previous crises are found to be influential determinants of GDP and GPI, with credit and exchange rate variables showing ambiguous results.
format Article
author Mohamad, Azhar
Hashim, Mastura
Sifat, Imtiaz Mohamma
author_facet Mohamad, Azhar
Hashim, Mastura
Sifat, Imtiaz Mohamma
author_sort Mohamad, Azhar
title The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
title_short The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
title_full The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
title_fullStr The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
title_full_unstemmed The sustainable development consequences of IMF debt vs. capital control: comparing progress in GPI and GDP terms for Korea and Malaysia
title_sort sustainable development consequences of imf debt vs. capital control: comparing progress in gpi and gdp terms for korea and malaysia
publisher Elsevier Ltd
publishDate 2019
url http://irep.iium.edu.my/73404/1/73404_The%20sustainable%20development%20consequences%20of%20IMF.pdf
http://irep.iium.edu.my/73404/2/73404_The%20sustainable%20development%20consequences%20of%20IMF_SCOPUS.pdf
http://irep.iium.edu.my/73404/13/73404_The%20sustainable%20development%20consequences%20of%20IMF%20debt_wos.pdf
http://irep.iium.edu.my/73404/
https://www.sciencedirect.com/science/article/pii/S0959652619320980
_version_ 1677780655665053696
score 13.211869

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