The Global South after the Crisis

The Global South after the Crisis

Growth, Inequality and Development in the Aftermath of the Great Recession

Edited by Hasan Cömert and Rex A. McKenzie

This volume is split into two accessible sections. The first part concentrates on the impact of the crisis on growth, inequality, policy responses and policy shifts in key areas such as central banking. The second part comprises individual country case studies and includes an exploration of the vulnerabilities related to the integration of developing economies into the world economy. The effect of the crisis on trade, and the ways in which some developing countries have entered into a prolonged period of stagnant growth following the global crisis are all considered.

Chapter 7: The global financial crisis: impact and response from Malaysia

Shankaran Nambiar

Subjects: economics and finance, development economics, post-keynesian economics

Abstract

The economic crisis of 2008 had its origins in the United States and subsequently affected the economies of developed countries, including the European Union, Japan and Singapore. These developments had a tremendous impact on the Malaysian economy. This article argues that, because of its size and openness, Malaysia was severely affected by the crisis through trade and financial channels. The instabilities in foreign markets led to poor demand for Malaysian exports. This led to a decline in Malaysian output and thus to labor market shocks, leading to retrenchments throughout the economy. The severity of the crisis suggests that Malaysia should not be unduly reliant on export led growth.

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