Indicative Planning of the West Malaysian Economy Using an Input-Output Projection Model
This paper discusses an input-output projection model which has been used for indicative planning of the West Malaysian economy into 1985. The model projects the structure of the economy including output, investment and labour in 1985 given a level of aggregate domestic consumption likely to be u...
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| Main Author: | |
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| Format: | Article |
| Language: | English English |
| Published: |
1985
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| Online Access: | http://psasir.upm.edu.my/id/eprint/2409/1/Indicative_Planning_of_the_West.pdf http://psasir.upm.edu.my/id/eprint/2409/ |
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| Summary: | This paper discusses an input-output projection model which has been used for indicative planning
of the West Malaysian economy into 1985. The model projects the structure of the economy including
output, investment and labour in 1985 given a level of aggregate domestic consumption likely
to be utilised in the target year. The basic projection indicates that the growth rate in per capita
private consumption of4 per cent per annum assumed in the model appears infeasible, particularly £n
terms of investment and labour requirements. The advent of technological changes, however, results
in substantial reduction in investment, labour and export requirements, thus increasing the propor·
tion of consumption in Gross Domestic Product in the target year. An increase in export prices also
reduces the level of capital formation, exports and labour required to sustain the projected growth
rate in consumption. The analysis of impHcations of an import replacement poHcy shows that import
substitution of manufactured goods reduces the strain on the economy. However, import-substitution
is benejt'c£al only up to a point where the pn'ce of domestically-produced manufactures is 10 per cent
higher than the overseas prices. |
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