A systems model of the Malaysian macro‐economy

Abstract

Undertakes the formalization and development of a simulational interactive macroeconometric model for Malaysia. Focuses on theoretical perspectives but covers applied aspects of the model relating to the factual case of Malaysia. Discusses the principal goals of attaining economic growth with distributive equity as spelt out in the Malaysian New Development Plan. Formalizes and interprets the structural model system and its reduced forms. Concludes that a demand‐driven economy governed by profit rates (yield rates) is the centrepiece of a dynamically growing economy. Shows that the interactive model system learning in and through an econometric modelling must evolve from an extensive economy‐institution‐society interface.