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Ahmad Fahme Mohd Ali · Naziatul Aziah Mohd Radzi · Ruzanifah Kosnin · Suchi Hassan · Siti Salina Saidin ·Jurnal Ekonomi Malaysia ·2021 ·JEL: B10, D15, D31, E21

The purpose of this paper is to investigate the consumption function among households in Kelantan Malaysia based on the Permanent Income Hypothesis (PIH). This study used secondary data obtained from annual reports, as well as from published and non-published data between 2000 and 2016. The ARDL bound testing approach to deal with cointegration was applied to estimate the long run correlation between the variables. Meanwhile, the error correction method (ECM) was used to determine any short run correlation. This study found a large disparity between the elasticity to consume from current income and the elasticity to consume from permanent income among households in Kelantan. Therefore, it can be concluded that in the case of Kelantan, the PIH is valid.

Abdul Rasheed Sithy Jesmy · Mohd Zaini Abd Karim · Shri Dewi Applanaidu ·Institutions and Economies ·2018 ·JEL: H56; O40; F50

The direct and indirect causes of armed conflict in South Asia is perhaps the single most important reason for increasing military expenditure. It is also a significant threat to the growth of national output in the region. This study examines the impact of conflict on economic growth in conflict-affected South Asian countries from 1980-2014 by employing sufficient determinants, the Solow growth model and Autoregressive Distributed Lag (ARDL) bounds test approach to cointegration. Since military expenditureand military participation have increased simultaneously with internal and external conflict, this study used military expenditure per warring population as a proxy for conflict. Apart from mixed conclusions in the literature, the results of this study suggest that conflict contributes significantly to decreasing per capita GDP in the short-and long-run across South Asia. The findings indicate that the effect is high in the long-run and is most severe in Pakistan, Sri Lanka and India since 85% of conflictin South Asia occurred in these three countries. The study recommends that policymakers and governments should adopt constructive policies to prevent and control internal and external conflicts. Ending conflict undoubtedly leads to minimising the cost of conflict and supports ways of enhancing output in South Asia.

Wong Sing Yun · Remali Yusoff ·Jurnal Ekonomi Malaysia ·2018

The aim of this paper is to investigate the determinants of the public education expenditure in Malaysia during the period of 35 years from 1982 to 2016. This study intends to address the existing research gaps within Malaysia context that failed to receive much attention in the past. The determinants of education expenditure will be modeled using time series data within the autoregressive distributed lag (ARDL) Bound Testing approach and Error Correction Model (ECM) method. The empirical findings from this study identified the real gross domestic product growth rate (GDP), unemployment rate (UNEM), inflation rate (INF) and working age population (POP2) as the long run determinants of public education expenditure. Findings from the ARDL Bound Testing result further supported the Keynesian CounterCyclical theory as implied by the negative relationship between economic growth and public education expenditure in the long run. The short run analysis through ECM demonstrated that fluctuations in education expenditure was sensitive to the real gross domestic product growth rate (D(GDP)), unemployment rate (D(UNEM)), population of age less than 15 (D(LNPOP1)), and population of age greater than 64 (D(LNPOP3)). This study further recommends that the policy makers to play the role in responding to the economic conditions and demands of the society in their decision-making of the future allocation.

Mohd Aqmin Abdul Wahab · Hazrul Izuan Shahiri · Mustazar Mansur · Mohd Azlan Shah Zaidi ·Jurnal Ekonomi Malaysia ·2018

This paper looks at the causes of increasing cost of living by studying two (2) main factors; frstly, the slow growth in income as compared to infation, and secondly the unproportional increase in standard of living as compared to income. For the frst factor, a time series regression model was constructred using the data from Household Income Survey report (various years) to compare the fuctutation in income against the infation rate year-on-year. For the second factor, we studied the expenditure elasticity of income for the household. A log-log linear regression model was developed taking into consideration the three (3) main groups of goods that household buys: Food, Transportation and Housing. We have studied the elasticities across income strata (B40, M40, T20) and location (Rural vs Urban) to observe the changes in elasticity with respect to those variables. The result of this study points that income growth has indeed surpasses infation rate from year to year, however the standard of living is increasing at a comparatively fast rate, as evidenced by high expenditure elasticities for several types of goods for B40s and M40s. This suggests that the standard of living, or living styles are the dominant factor that contributes to the problems of increasing cost of living.

Loo Sze Ying · Mukaramah Harun ·Jurnal Ekonomi Malaysia ·2019

This paper estimated the reactions of frms and households to the change of government expenditure from fuel subsidies to two alternative fscal regimes, including the expansion of government expenditure on agricultural investment and direct cash transfers. Outcomes brought by the government expenditure changes to outputs of production for frms, together with the household consumption expenditure, were taken into account. This study was carried out by using a Löfgren-based computable general equilibrium (CGE) model. The fndings showed that complete fuel withdrawal was found to have adverse impacts on frms and households. The withdrawal of subsidy brought a lackluster performance in domestic production. Firms that needed large amounts of fuel products to produce outputs were greatly affected. Besides, households of all segments faced large consumption loss. Nevertheless, the resulting adverse impacts on frms and households could be minimized with the implementation of mitigation measures along with the subsidy reform. The additional fund transfer to the agricultural sector had the merits of improving domestic production and minimizing the consumption loss of the population. In contrast, the direct cash transfer benefted the target population -- the mediumand low-income segments in the urban and rural areas.