Savings-led growth theories: A time series analysis for Malaysia using the bootstrapping and time-varying causality techniques

The purpose of this study is to empirically investigate the vindication of savings-led growth hypothesis for the Malaysian economy with the long run TYDL version of Granger causality – Toda and Yamamoto (1995) and Dolado and Lütkepohl (1996). This study used the quarterly sample from 1970:Q1 to 2008:Q4. The recursive regression procedure will also incorporate into the TYDL causality test to measure the stability of the savings-led growth hypothesis in the long run. Our empirical results support that the savings-led growth hypothesis is long run phenomenon and stable over time. Therefore, the Malaysian dataset supports the endogenous growth theory.