Abstract:
This study attempts to investigate the relationship between gross domestic product and government consumption in Malaysia. This data sourced within the period from 2007 to 2015 and by obtaining quarterly data. Data was collected from Bloomberg. This study used the cointegration analysis and the causality approach by Johansen, ARDL and Granger causality to analyse the relationship between government consumption and economic growth. The results of this study show there is long run relationship and short run relationship between government consumption and economic growth. Overall findings show that there is a positive and significant relationship between government consumption and economic growth in Malaysia.
