The Dynamic Synergies between Agriculture Output and Economic Growth in Malaysia
Abstract
This paper investigates the dynamic synergies between agriculture sector and economic growth in Malaysia throughout historical economic policy adjustments spanning from 1970 to 2010. From the analysis, the contribution of agriculture sector output to the Malaysian economy has been decreasing despite several agriculture-led economic growth policies that have been implemented, including the very recent New Economic Model (NEM). Specifically, we employ Johansen-Juselius (1990) cointegration test and reveals that agriculture and economic growth were found to be moving together in the long run. Moreover, we examine the direction of causality between agriculture output and economic growth within the vector error-correction model (VECM). The test shows that both agriculture and economic growth have no causality direction at least in the short run but there exist a bi-directional causality movement in the long run. From this empirical testing and policy analysis, we can suggest that policy makers should pay attention to the holistic and sustainable development of agriculture sector into their policy modelling in promoting sustainable economic growth.
This work is licensed under a Creative Commons Attribution 3.0 License.
International Journal of Economics and Finance ISSN 1916-971X (Print) ISSN 1916-9728 (Online)
Copyright © Canadian Center of Science and Education
To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.