Dr Siti Fatimah Ismail
@um.edu.my
University of Malaya
@um.edu.my
University of Malaya
This study investigates the relative effectiveness of monetary and fiscal policies in stabilizing the Malaysian economy through advanced macroeconometric modeling. While both policy instruments have historically played crucial roles in managing growth, inflation, and employment, evidence on their comparative impact remains inconclusive. Drawing on quarterly data from 1980–2025, the research employs ARDL/ECM, and simulation techniques to analyze short- and long-run effects of policy shocks, including responses under crisis versus stable growth conditions. By assessing the dynamic interactions of interest rates, money supply, exchange rate interventions, government spending, taxation, and fiscal deficits, the study provides empirical insights into which policy is more effective under varying macroeconomic environments. Expected outcomes include evidence-based recommendations for optimal policy coordination between Bank Negara Malaysia and the Ministry
Macroeconomic policy remains at the center of debates on sustainable growth and stability. For ASEAN countries, monetary and fiscal policies play critical roles in navigating global shocks, financial integration, and development challenges. Yet, little is known about their relative effectiveness across countries with varying economic structures. This project employs panel macroeconometric modeling (Panel VAR, GMM, and panel cointegration) using quarterly data for ASEAN economies (2000–2025) to systematically evaluate the comparative effectiveness of monetary versus fiscal policy. It will explore both short-run and long-run effects, examine cross-country heterogeneity, and simulate policy scenarios. Expected outcomes include evidence-based recommendations for optimal policy coordination between Bank Negara Malaysia and the Ministry of Finance, contributions to macroeconomic theory in emerging economies, and support for Malaysia’s long-term development agenda.
Scopus Publications
