Macroeconomic Instability Index and Malaysia Economic Performance

Liew, Venus Khim−Sen; Rowland, Racquel; Puah, Chin‐Hong; Hui, Jerome Kueh Swee; Rahim, Rossazana Bt Ab; Ling, Shirly Wong Siew

doi:10.5539/ibr.v11n3p179

Cited by 5 publications

(5 citation statements)

References 4 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Stability or fluctuations among macroeconomic indicators or variables have been found to play an influential role in the development of economies around the globe (refer to Bleaney, 1996; Sanchez-Robles, 1998; Haghighi et al ., 2012; Ali and Rehman, 2015; Liew et al ., 2018). The current study delves into the subject matter by assessing the impact of inflation uncertainty, macroeconomic risk and other key variables on financial institutions’ efficiency among SSA economies.…”

Section: Discussionmentioning

confidence: 99%

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

Abaidoo

Agyapong

2023

JED

View full text Add to dashboard Cite

PurposeThe study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).Design/methodology/approachData for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.FindingsReported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.Practical implicationsFor policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.Originality/valueThe approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

show abstract

Section: Discussionmentioning

confidence: 99%

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

Abaidoo

Agyapong

2023

JED

View full text Add to dashboard Cite

show abstract

“…An alternative is to estimate a Dynamic OLS (DOLS) or Fully Modified OLS (FMOLS) model. The FMOLS requires all variables to be integrated in the same order (Othman & Masih, 2015). For this reason, the DOLS is often preferred over FMOLS.…”

Section: Methodsmentioning

confidence: 99%

“…Hence, the study investigates the sources of instability in Nigeria’s manufacturing performance over the period 1981–2018. To achieve this objective, we have developed a manufacturing instability (MANI) index for Nigeria following the framework adopted by Liew et al (2018). Aside from serving as a helpful reference point for further study, the results of the article will assist policy formulations in stemming the tide of poor performance of the Nigerian manufacturing sector over the years.…”

Section: Introductionmentioning

confidence: 99%

Sources of Instability in Nigeria’s Manufacturing Performance: 1981–2018

Onodje

2022

The Indian Economic Journal

View full text Add to dashboard Cite

The article investigates factors that may be responsible for observed instability in Nigeria’s manufacturing sector performance. Based on growing concerns regarding early deindustrialisation observed for many developing countries, the study examines how a menu of fiscal and monetary policies can be applied to revitalise the Nigerian manufacturing sector. Consequently, we construct an index of manufacturing sector instability and examine how it responds to a mixture of fiscal and monetary policy variables. We use annual time series data from 1981–2018 and apply the ARDL bounds test technique. Our findings show that budget deficits induce instability in the performance of the Nigerian manufacturing sector, while government infrastructural investments stabilise it. The monetary policy instruments were found to have inconsistent short-run and long-run influences but mostly conform with theory. JEL Codes: F63, L20, L25, L60, O10, O14

show abstract

“…However, there is a price to pay for globalization as domestic economy has been affected by financial crises, including the 1997 Asian Financial Crisis, the 2008 global financial crisis and recently the economic crises due to the COVID-19 pandemic that started at the end of 2019. During the Asian financial crisis, Malaysian exports dropped by almost 20 percent, commercial non-performing loans increased by 18 percent, the Kuala Lumpur Stock Exchange (KLSE) reported a huge loss, and the currency depreciated badly (Liew et al, 2018). As the COVID-19 pandemic is still unfolding, many countries are facing purchasing power deterioration due to high inflation and unemployment.…”

Section: Introductionmentioning

confidence: 99%

How far does the stock market performance influence Malaysia’s consumers purchasing power?

2022

KJSS

View full text Add to dashboard Cite

This study examined the asymmetric effect of stock market index performance on the external competitiveness of purchasing power for Malaysia covering the period of 1996-2019 utilizing the Ender and Siklos (2001) and the threshold vector error correction model (TVECM) approaches. The empirical findings confirmed an existing of asymmetric effect between stock market index and the external competitiveness purchasing power in Malaysia cases. There is evidence of negative relationship between both series with a bidirectional asymmetric causality relationship. Therefore, policymakers should give more attention of stock market performance to strengthen the current and future monetary policies related to consumer's purchasing power agenda in Malaysia and consider the current global economic uncertainty caused by the COVID-19 pandemic worldwide.

show abstract

Macroeconomic Instability Index and Malaysia Economic Performance

Cited by 5 publications

References 4 publications

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

Inflation uncertainty, macroeconomic instability and the efficiency of financial institutions

Sources of Instability in Nigeria’s Manufacturing Performance: 1981–2018

How far does the stock market performance influence Malaysia’s consumers purchasing power?

Contact Info

Product

Resources

About