How did the Asian financial crisis impact income inequality in Malaysia?
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The Asian financial crisis had a significant impact on income inequality in Malaysia. Initially, the crisis led to severe economic contraction and a decline in the health of the financial system, prompting the government to implement measures like the National Economic Recovery Plan (NERP) . This crisis caused Malaysia's GDP to contract drastically, resulting in a substantial decrease in per capita income and a loss of steady-state output . Income differentials across states in Malaysia were also affected, with pronounced disparities at lower income levels, despite some regions performing better than others . However, over time, Malaysia managed to improve income distribution, as indicated by a decreasing trend in income inequality based on semi-parametric analysis of household incomes for various years .
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