This paper examines the economy-wide impacts of recent oil price shocks on the Malaysian economy. To achieve this objective, an integrated methodological framework that combines econometric and input-output models is utilized to assess the impacts of an oil price shock on tax revenues, employment, labor income and gross domestic product (GDP). Our results reveal that the recent oil price shocks significantly affects these macroeconomic variables. The decline in oil prices from 2015 to 2016 reduces tax revenues by 10.5%, lower GDP by 1.9% and increases the unemployment rate by 0.3%. As such, the sharp crunch in oil prices serves as a reminder to policymakers on the vulnerability inherent in overreliance on oil exports and the urgent need to diversify the economy.

Input-output linkages and multipliers are the two measures that are frequently used to find the drivers of an economy. Deriving from these two measures based on the traditional approach fails to consider the relative sectoral sizes. This paper introduces new linkage and multiplier measures that do not solely adjust for the relative sizes, but also extend the measures for policy-relevant indicators in Malaysia. Comparing the results between the traditional approach and the new approach, there is a clear indication that the former incorrectly identified the drivers of the Malaysian economy. The traditional approach not only introduced bias in linkages, but also overestimated the actual size of the multipliers. The new linkage and multiplier measures that were developed in this paper can be applied for other economies in finding key drivers for specific policy goals.

Contribution of final demand components to gross domestic product (GDP) is often measured by a simple aggregated national accounting identity. Under this conventional approach, the contribution of exports is subtracted from imports to compute the contribution of net exports but it fails to split the imported intermediate and final use that is embodied in each domestic final demand. The so-called importadjusted approach is considered to be an ideal approach to measure the contribution of each final demand component to GDP. This approach splits imported intermediate and final use for each final demand component instead of accumulating all of them in the export component. This paper provides a heuristic approach for the application of import-adjusted approach to time-series data. We show that given a benchmark inputoutput table and provided with the annual trade statistics, the bias in measuring the contribution of domestic demand and foreign trade can be reduced. More importantly, we have provided a practical approach that does not only reduce man-hours required for database development but also obtain satisfactory findings. Results verify that the conventional approach tends to overestimate the contribution of domestic demands and underestimate the contribution of net trade to GDP.

This paper assesses the economic impact of the recycling sector in Malaysia to gauge its potential for strengthening green-based economic growth in alignment with the Sustainable Development Goals (SDGs). This study employs a comparative impact assessment to analyse the input-output multiplier and linkages using the national input-output tables for 2005, 2010 and 2015. Our results indicate that the recycling sector has high potential to transform waste to wealth from which its value-added multiplier is sufficiently high and is also reinforced with high spillover effects. The recycling sector is identified as a strategic sector, where approximately 70% of its products are embodied in intermediate demand. This sector conforms to circular economy practices as other sectors in the economy are utilising recyclables for remanufacturing purposes. The value-added footprint level of the recycling sector also shows an increasing trend that implies its growing importance in supporting the growth of other production sectors in the economy. At the sectoral level, most of the recyclables are utilised by the Wholesale and Retail Trade sector. Hence, our work emphasises the importance of prioritising the recycling sector in development plans, as well as improving and strengthening the backward linkages between the recycling sector with other production sectors.

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