Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model
This paper studies economic growth in Malaysia, with the purpose of assessing the potential to attain the status and characteristics of a high-income country. Future economic growth is simulated under a business-as-usual baseline, where the growth...
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/844761592242576533/Malaysias-Economic-Growth-and-Transition-to-High-Income-An-Application-of-the-World-Bank-Long-Term-Growth-Model-LTGM http://hdl.handle.net/10986/33939 |
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okr-10986-339392022-09-20T00:10:38Z Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model Devadas, Sharmila Guzman, Jorge Kim, Young Eun Loayza, Norman Pennings, Steven LONG-TERM GROWTH MODEL LTGM ECONOMIC GROWTH TOTAL FACTOR PRODUCTIVITY HUMAN CAPITAL PRIVATE INVESTMENT LABOR FORCE PARTICIPATION INNOVATION MARKET EFFICIENCY This paper studies economic growth in Malaysia, with the purpose of assessing the potential to attain the status and characteristics of a high-income country. Future economic growth is simulated under a business-as-usual baseline, where the growth drivers follow their historical or recent trends, and under different scenarios of reform, using the World Bank Long-Term Growth Model (LTGM). Under the business-as-usual baseline, Malaysia's GDP growth is expected to decline from 4.5 to 2.0 percent over the next three decades, following the country's transition to high income in 2024 (which might be delayed due to the effects of COVID-19). This decline is partly due to demographics, but also a declining marginal product of private capital and slowing growth rates of total factor productivity and human capital. Strong reforms are required for Malaysia to grow beyond what is expected based on historical trends, especially for human capital, female labor force participation, and total factor productivity. In the strong reform scenario, based on growth drivers achieving a target corresponding to the 75th percentile of high-income countries, GDP growth is expected to have a substantially higher trajectory, reaching 3.6 percent by 2050. 2020-06-18T15:05:53Z 2020-06-18T15:05:53Z 2020-06 Working Paper http://documents.worldbank.org/curated/en/844761592242576533/Malaysias-Economic-Growth-and-Transition-to-High-Income-An-Application-of-the-World-Bank-Long-Term-Growth-Model-LTGM http://hdl.handle.net/10986/33939 English Policy Research Working Paper;No. 9278 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper East Asia and Pacific Malaysia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
LONG-TERM GROWTH MODEL LTGM ECONOMIC GROWTH TOTAL FACTOR PRODUCTIVITY HUMAN CAPITAL PRIVATE INVESTMENT LABOR FORCE PARTICIPATION INNOVATION MARKET EFFICIENCY |
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LONG-TERM GROWTH MODEL LTGM ECONOMIC GROWTH TOTAL FACTOR PRODUCTIVITY HUMAN CAPITAL PRIVATE INVESTMENT LABOR FORCE PARTICIPATION INNOVATION MARKET EFFICIENCY Devadas, Sharmila Guzman, Jorge Kim, Young Eun Loayza, Norman Pennings, Steven Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| geographic_facet |
East Asia and Pacific Malaysia |
| relation |
Policy Research Working Paper;No. 9278 |
| description |
This paper studies economic growth in
Malaysia, with the purpose of assessing the potential to
attain the status and characteristics of a high-income
country. Future economic growth is simulated under a
business-as-usual baseline, where the growth drivers follow
their historical or recent trends, and under different
scenarios of reform, using the World Bank Long-Term Growth
Model (LTGM). Under the business-as-usual baseline,
Malaysia's GDP growth is expected to decline from 4.5
to 2.0 percent over the next three decades, following the
country's transition to high income in 2024 (which
might be delayed due to the effects of COVID-19). This
decline is partly due to demographics, but also a declining
marginal product of private capital and slowing growth rates
of total factor productivity and human capital. Strong
reforms are required for Malaysia to grow beyond what is
expected based on historical trends, especially for human
capital, female labor force participation, and total factor
productivity. In the strong reform scenario, based on growth
drivers achieving a target corresponding to the 75th
percentile of high-income countries, GDP growth is expected
to have a substantially higher trajectory, reaching 3.6
percent by 2050. |
| format |
Working Paper |
| author |
Devadas, Sharmila Guzman, Jorge Kim, Young Eun Loayza, Norman Pennings, Steven |
| author_facet |
Devadas, Sharmila Guzman, Jorge Kim, Young Eun Loayza, Norman Pennings, Steven |
| author_sort |
Devadas, Sharmila |
| title |
Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| title_short |
Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| title_full |
Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| title_fullStr |
Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| title_full_unstemmed |
Malaysia's Economic Growth and Transition to High Income : An Application of the World Bank Long Term Growth Model |
| title_sort |
malaysia's economic growth and transition to high income : an application of the world bank long term growth model |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/844761592242576533/Malaysias-Economic-Growth-and-Transition-to-High-Income-An-Application-of-the-World-Bank-Long-Term-Growth-Model-LTGM http://hdl.handle.net/10986/33939 |
| _version_ |
1764479841270235136 |