{"id":3908,"date":"2021-06-12T17:48:53","date_gmt":"2021-06-12T09:48:53","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=3908"},"modified":"2021-09-09T12:29:58","modified_gmt":"2021-09-09T04:29:58","slug":"a-bayesian-vector-autoregressive-analysis-of-price-and-industrial-shocks-on-the-malaysian-economy","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/a-bayesian-vector-autoregressive-analysis-of-price-and-industrial-shocks-on-the-malaysian-economy\/","title":{"rendered":"A Bayesian Vector Autoregressive Analysis of Price and Industrial Shocks on the Malaysian Economy"},"content":{"rendered":"<p><span class=\"fontstyle0\">Aside from identifying the determinants of economic growth, ensuring a stable evolution of output is crucial. This paper therefore, intends to shed light on the effects of consumer prices (<\/span><span class=\"fontstyle0\">CPI<\/span><span class=\"fontstyle0\">) and producer prices (<\/span><span class=\"fontstyle0\">PPI<\/span><span class=\"fontstyle0\">) as well as industrial output (<\/span><span class=\"fontstyle0\">IPI<\/span><span class=\"fontstyle0\">) shocks on real aggregate output. Preliminary examination of data suggests a critical analysis on the nexus between aforementioned variables is warranted. Conforming to precedence in the literature, Bayesian Vector Autoregressive analysis was performed on the detrended series. As expected, a shock in consumer prices induces a negative response in real <\/span><span class=\"fontstyle0\">GDP <\/span><span class=\"fontstyle0\">while a positive response was observed from a shock in producer prices. However, we note that the positive response from <\/span><span class=\"fontstyle0\">PPI <\/span><span class=\"fontstyle0\">is subdued which may be accounted for by the consideration of negative consumer<br \/>\nsentiment in producers\u2019 decision. Additionally, we find positive <\/span><span class=\"fontstyle0\">CPI <\/span><span class=\"fontstyle0\">response on shocks emanating from real <\/span><span class=\"fontstyle0\">GDP <\/span><span class=\"fontstyle0\">and <\/span><span class=\"fontstyle0\">IPI<\/span><span class=\"fontstyle0\">. We note that the weak <\/span><span class=\"fontstyle0\">CPI <\/span><span class=\"fontstyle0\">response from innovation in <\/span><span class=\"fontstyle0\">IPI <\/span><span class=\"fontstyle0\">may be due to the percentage of exported goods in the Malaysian manufacturing sector. Also noteworthy, is that innovations in <\/span><span class=\"fontstyle0\">CPI <\/span><span class=\"fontstyle0\">and real <\/span><span class=\"fontstyle0\">GDP <\/span><span class=\"fontstyle0\">induce positive response in <\/span><span class=\"fontstyle0\">IPI<\/span><span class=\"fontstyle0\">, but followed by mild negative response. We ascribe this observation to inventory overshooting.<\/span><\/p>\n","protected":false},"template":"","tags":[531,186,534,533,532],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-3908","article","type-article","status-publish","tag-bayesian","tag-economic-growth","tag-industrial-production","tag-price-indices","tag-var-analysis","article-type-normal-article"],"_links":{"self":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/3908","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article"}],"about":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/types\/article"}],"version-history":[{"count":1,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/3908\/revisions"}],"predecessor-version":[{"id":3912,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article\/3908\/revisions\/3912"}],"wp:attachment":[{"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/media?parent=3908"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/tags?post=3908"},{"taxonomy":"jel-code","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/jel-code?post=3908"},{"taxonomy":"article-type","embeddable":true,"href":"https:\/\/www.ukm.my\/jem\/wp-json\/wp\/v2\/article-type?post=3908"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}