The effects of credit supply shocks on Malaysia's economy

This study has examined the impacts of credit supply shocks and other common economic shocks (aggregate demand & supply and monetary shocks) on Malaysia's macroeconomic variables, using the Bayesian structural vector autoregressive (SVAR) model and employing sign restrictions. The results...

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Main Authors: Khair Afham, M. S. M., Rosland, Anitha
Format: Article
Published: University Putra Malaysia 2022
Online Access:http://psasir.upm.edu.my/id/eprint/103531/
http://www.ijem.upm.edu.my/vol16no2.htm
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spelling my.upm.eprints.1035312023-05-23T02:20:11Z http://psasir.upm.edu.my/id/eprint/103531/ The effects of credit supply shocks on Malaysia's economy Khair Afham, M. S. M. Rosland, Anitha This study has examined the impacts of credit supply shocks and other common economic shocks (aggregate demand & supply and monetary shocks) on Malaysia's macroeconomic variables, using the Bayesian structural vector autoregressive (SVAR) model and employing sign restrictions. The results showed that an expansionary credit supply shock positively affected the Malaysian economy, consistent with the existing literature. Based on the variance decomposition finding, credit supply shocks explained a significant portion of the anticipated variation in the GDP growth, inflation, and, most importantly, credit growth in Malaysia. This study further decomposed total private non-financial corporate loans into two components: households and non-financial firms. Unlike other economies that have extensively researched this subject matter (US, UK, Euro Area), the growth rate of households and non-financial firms differed greatly in Malaysia. The empirical findings revealed considerable distinctions between these two components, indicating that different treatments or policy formulations are required rather than employing the same policy to boost or govern Malaysia's credit market. University Putra Malaysia 2022 Article PeerReviewed Khair Afham, M. S. M. and Rosland, Anitha (2022) The effects of credit supply shocks on Malaysia's economy. International Journal of Economics and Management, 16 (2). 257 - 270. ISSN 1823-836X http://www.ijem.upm.edu.my/vol16no2.htm 10.47836/ijeam.16.2.08
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
description This study has examined the impacts of credit supply shocks and other common economic shocks (aggregate demand & supply and monetary shocks) on Malaysia's macroeconomic variables, using the Bayesian structural vector autoregressive (SVAR) model and employing sign restrictions. The results showed that an expansionary credit supply shock positively affected the Malaysian economy, consistent with the existing literature. Based on the variance decomposition finding, credit supply shocks explained a significant portion of the anticipated variation in the GDP growth, inflation, and, most importantly, credit growth in Malaysia. This study further decomposed total private non-financial corporate loans into two components: households and non-financial firms. Unlike other economies that have extensively researched this subject matter (US, UK, Euro Area), the growth rate of households and non-financial firms differed greatly in Malaysia. The empirical findings revealed considerable distinctions between these two components, indicating that different treatments or policy formulations are required rather than employing the same policy to boost or govern Malaysia's credit market.
format Article
author Khair Afham, M. S. M.
Rosland, Anitha
spellingShingle Khair Afham, M. S. M.
Rosland, Anitha
The effects of credit supply shocks on Malaysia's economy
author_facet Khair Afham, M. S. M.
Rosland, Anitha
author_sort Khair Afham, M. S. M.
title The effects of credit supply shocks on Malaysia's economy
title_short The effects of credit supply shocks on Malaysia's economy
title_full The effects of credit supply shocks on Malaysia's economy
title_fullStr The effects of credit supply shocks on Malaysia's economy
title_full_unstemmed The effects of credit supply shocks on Malaysia's economy
title_sort effects of credit supply shocks on malaysia's economy
publisher University Putra Malaysia
publishDate 2022
url http://psasir.upm.edu.my/id/eprint/103531/
http://www.ijem.upm.edu.my/vol16no2.htm
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