Malaysia: from economic recovery to sustained economic growth

摘要

This paper presents an internally consistent macroeconomic framework that could be used as a first step toward a more comprehensive quantitative and qualitative assessment of the adjustment alternatives facing Malaysia. An open economy model is developed to identify which of the gaps—savings, foreign exchange, and fiscal—become the binding constraints in the adjustment process of Malaysia as it strives to sustain economic growth in the postcrisis era. Using 1995 as a base year, the model is simulated over the short and medium terms to demonstrate a sharp trade-off between investment (economic growth) and capacity utilization under foreign exchange constraints.