How Stable is the Savings-led Growth Hypothesis in Malaysia? The Bootstrap Simulation and Recursive Causality Tests

Chor Foon Tang

Margin: The Journal of Applied Economic Research, 2015, vol. 9, issue 1, 1-17

Abstract: The purpose of this study is to empirically investigate the vindication of the savings-led growth hypothesis for the Malaysian economy with the long-run TYDL version of the Granger causality test—Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996). This study used the quarterly sample from 1970:Q1 to 2008:Q4. The recursive regression procedure will also incorporate into the TYDL causality test to measure the stability of the savings-led growth hypothesis in the long-run. Our empirical results support that the savings-led growth hypothesis is a long-run phenomenon and stable over time. Therefore, the Malaysian dataset supports the endogenous growth theory. JEL Classification: C22, E21, O16

Keywords: Causality; Malaysia; Recursive regression; Savings-led growth; Stability (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:mareco:v:9:y:2015:i:1:p:1-17

DOI: 10.1177/0973801014557393

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