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2020 | OriginalPaper | Chapter

48. The Effects of Crude Oil Price Volatility, Stock Price, Exchange Rate and Interest Rate on Malaysia’s Economic Growth

Authors : Farah Rahim, Zarinah Hamid

Published in: Advances in Cross-Section Data Methods in Applied Economic Research

Publisher: Springer International Publishing

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Abstract

This study examines the effects and relationships between Malaysia’s economic growth and selected variables which are oil price volatility, stock price, real exchange rate and real interest rate. Using time-series data methodology, the study employs unit root test using Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP), Auto-Regressive Distribution Lag (ARDL) model supplemented by Bounds F-Testing, Johansen-Julius Co-integration test and Granger causality test. The long-run equation derived from ARDL shows that there are positive relationships for stock price and real exchange rate whilst there are negative relationships between oil price volatility and real interest rate. Furthermore, Granger causality test shows that only stock price and real interest rates have an impact on Malaysia’s gross domestic product (GDP) in the short run. Finally, sound policy recommendations are suggested, in particular, to address oil price volatility in a forward-looking manner as well as monetary-friendly measures to further support Malaysia’s economic growth.

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Metadata
Title
The Effects of Crude Oil Price Volatility, Stock Price, Exchange Rate and Interest Rate on Malaysia’s Economic Growth
Authors
Farah Rahim
Zarinah Hamid
Copyright Year
2020
Book
Advances in Cross-Section Data Methods in Applied Economic Research

Print ISBN: 978-3-030-38252-0

Electronic ISBN: 978-3-030-38253-7

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-38253-7_48

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