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Measuring the economic impacts of recent oil price shocks on oil dependent economy evidence from Malaysia


Citation

Maji, Ibrahim Kabiru and Saari, Mohd Yusof and Habibullah, Muzafar Shah and Utit, Chakrin (2017) Measuring the economic impacts of recent oil price shocks on oil dependent economy evidence from Malaysia. Policy Studies, 38 (4). pp. 357-391. ISSN 0144-2872; ESSN: 1470-1006

Abstract

This paper examines the economy-wide impacts of recent oil price shocks on the Malaysian economy. To achieve this objective, an integrated methodological framework that combines econometric and input–output models is utilized to assess the impacts of an oil price shock on tax revenues, employment, labor income and gross domestic product (GDP). Our results reveal that the recent oil price shocks significantly affects these macroeconomic variables. The decline in oil prices from 2015 to 2016 reduces tax revenues by 10.5%, lower GDP by 1.9% and increases the unemployment rate by 0.3%. As such, the sharp crunch in oil prices serves as a reminder to policymakers on the vulnerability inherent in overreliance on oil exports and the urgent need to diversify the economy.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.1080/01442872.2017.1320706
Publisher: Taylor & Francis
Keywords: Oil price; Econometric; Input–output; Malaysia
Depositing User: Nurul Ainie Mokhtar
Date Deposited: 08 Jan 2020 03:23
Last Modified: 08 Jan 2020 03:23
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1080/01442872.2017.1320706
URI: http://psasir.upm.edu.my/id/eprint/62373
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