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Government Spending and Nations Debt Affect the Gross Domestic Product in
Malaysia
Najaa Nadrah bt Adanan
Supervisor: Encik Mohd Najit bin Sukemi
Bachelor of Economics (Natural Resources)
School of Social Economic Development
Government spending is one important component in a country's government revenue
and is a driver of economic growth in countries such as Malaysia that adopting the practice
of deficit spending that expenses exceed income.This study aims to determine the extent
to which the government spending and the national debt affect changes to the Gross
Domestic Product (GDP) in Malaysia. The dependent variable in this study is represented
by Gross Domestic Product (GDP) in Malaysia while debt nations and government
spending are independent variable. The data used in this study were from 1987 to 2016
for 30 years. Time series econometric methods applied in this study which consists of the
Unit Root Test, Johansen Cointegration test and Granger Cause Testing grounds to
determine the relationship between the two variables.
1492 | UMT UNDERGRADUATE RESEARCH DAY 2018