Public Debt Dynamics in Emerging Markets: The Case of Malaysia

  • Shariff Umar Shariff Abd. Kadir
  • Wong Hock Tsen


This paper aims to investigate the impact of macroeconomic shocks on public debt dynamics in Malaysia. Time-series macroeconomic data spanning from 1980Q1-2020Q3 used in this study. The dynamic relationships are examined through impulse response functions (IRFs). The SVAR modelling approach is employed as it can capture the key characteristics of a small open economy. The results demonstrate that after a budget surplus shock, the government debt ratio falls, indicating a Ricardian regime. Domestic inflation triggered the government debt ratio to decline. Similarly, a reduction in the debt ratio as a result of a domestic output shock. The response of government debt to trade openness follows a similar pattern. In contrast, interest rate shock elevated government debt.


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How to Cite
ABD. KADIR, Shariff Umar Shariff; HOCK TSEN, Wong. Public Debt Dynamics in Emerging Markets: The Case of Malaysia. International Journal of Advanced Research in Economics and Finance, [S.l.], v. 3, n. 3, p. 171-185, oct. 2021. ISSN 2682-812X. Available at: <>. Date accessed: 20 may 2024.
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