Siti Nurazira Mohd Daud

Revisiting the role of external debt in economic growth of developing countries

This paper proposes a study on the contribution of external debt to the expansion of economic growth for 31 developing countries. Over a period of 36 years, by using dynamic panel data econometrics estimation GMM-system, the results reveal that the accumulation of external debt is associated with a slowdown in the economies of the developing countries. In addition, this paper finds evidence that debt service ratio does not crowd out the investment rate in developing countries. In other words, even though external debt is negatively associated with economic growth, countries are found to be safe from being in the debt overhang hypothesis. Furthermore, there is evidence to support the existence of spatial dependence in the growth model, suggesting the existence of a positive spillover effect of growth among the neighbouring countries.

An Accumulation of International Reserves and External Debt: Evidence from Developing Countries

Abstract The main analytical contribution of this paper is to analyze the cost of the decision to jointly hold reserves and sovereign debt. By analyzing the impact of holding reserves and sovereign debt on sovereign credit ratings will provide the evidence of the costs of holding reserves and debt with respect to credit risk. It is found that the positive effect of accumulation reserves that aims to improve sovereign ratings has been crowding-out by the negative effect of accumulation external debt which resulted in a net negative effect. As such, it is suggested that countries reduce their sovereign debt in order to maintain a good credit risk position while holds international reserves at the optimal level of 3.67 in a month of imports which is slightly higher than the conventional rule.

Government debt and economic growth in Malaysia: the role of institutional quality

We examine the role of economic freedom in the debt-growth model. There is evidence of the contingency effect of institutional quality on the relationship between government debt and economic growth.

An unobserved component analysis of Malaysia’s house prices

Purpose This paper aims to investigate Malaysia’s house prices behaviour by decomposing trend, cycle and stochastic component. Design/methodology/approach The authors perform an unobserved component model of a structural time series and Markov switching model that covers the period 1999Q1 to 2015Q4. Findings The results reveal that the variation in house price in Malaysia is best explained by its trend level, with a small role played by the cycle component; this implies the potential for gaining returns on investments in property by investors and households. The results also show that Malaysia’s HPI cycle is between 8 and 17 years which, in relative terms, is twice the length of the growth cycle and the business cycle in the economy. Meanwhile, the overall movement of HPI is forecast to have a marginal price increase up to 2028Q2. Originality/value As house prices remained elevated during the year, the house price dynamic is pivotal for understanding the source of changes in house price. With major findings centred on the relationship between house prices and macroeconomic as well as policy variables, little attention has been paid to composing the trend, cycle and seasonal pattern from the house price index, thus understanding the behaviour of house prices’ unobserved components.

Credit and the housing boom in Malaysa: a come back?

This article investigates the existence of credit and housing booms in the Malaysian economy, with high levels of household indebtedness. The results reveal that both the credit boom and the housing boom exist and imply the fragility of the financial sector of the economy.Â

Federal government debt and economic growth: Evidence from Malaysia

This article conducts an investigation into the effect of federal government debt on Malaysia’s economic growth with the application of threshold regression. The result reveals that, beyond the government debt threshold level, the country is experiencing a positive effect on economic growth.