Estimation of Malaysia Public Debt Threshold
The objective of this study is to examine the implication of the public debt on the economic growth of Malaysia from the perspective of different public debt levels threshold. Threshold Regression method is utilized to identify the public debt threshold from 1991:Q1-2014:Q4 and examine the hetero...
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| Main Authors: | , , , |
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| Other Authors: | |
| Format: | Book Section |
| Language: | English |
| Published: |
Universiti Sains Malaysia
2016
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| Subjects: | |
| Online Access: | http://eprints.usm.my/53681/1/pages%20from%2017%20-%2023%20iccei2016-proceedings.pdf http://eprints.usm.my/53681/ |
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| Summary: | The objective of this study is to examine the implication of the public debt on the economic
growth of Malaysia from the perspective of different public debt levels threshold. Threshold
Regression method is utilized to identify the public debt threshold from 1991:Q1-2014:Q4
and examine the heterogeneous impacts of the public debt on growth based on certain
threshold levels. Empirical results indicate that there is a positive association between the
public debt and economic growth when the public debt is below 41% of GDP threshold level.
Furthermore, there is a marginal positive impact when the public debt level falls between
41%-53% of GDP threshold levels. However, there is a harmful impact on growth when
public debt is above 53% of GDP threshold level. As a result, managing the public debt
position and the quality of the debt are important to ensure sustainable economic growth. |
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