Study of Economic Growth in Thai Economy <Article>

This empirical investigation seeks to detect empirical explanations for the behavior of the Thai economy and its production input efficiency within the process of economic development for last three decades. The notion of estimated parameters used is the elasticity or productivity, which has estimated through the econometric estimation of Cobb-Douglas production function. After conducting various statistical test, AR(1) model incorporating some input factors production function is superior to ARCH-type specifications for growth of Thai economy. A significant AR coefficient demonstrates the martingale process that suggests a long memory in any change in the annual gross domestic output. A second aspect of this study is to argue against the traditional belief that the estimated parameters of production inputs are time-varying process. The empirical findings from a state space model suggest evidence that they vary through time. They also shed elucidate the sensitivity of input factor efficiency following the sharp fallout in the 1997 financial crisis. The current absorptive capability of technological transfer from foreign countries via indirect channels seems to be significantly improved. A third finding is that the framework of inflation targeting has not gain trustworthiness to the marketplace and Thai economy has increasingly relied on capital investment. Time-varying parameter method also provides evidence of two reversal direction of inflation uncertainty on economic growth from negative to positive effect

Exploring long-run relationship and error correction of Thai output and price

As the Thai economy has integrated into the world system, it increasingly endures not only internal circumstances, but also external turmoils. Stabilizing the country’s growth and inflation from macroeconomic shocks has then become a challenge to policymakers. This study thus concentrates on investigating the long-run relationship and the adjustment process towards the equilibrium of output and price of Thailand from 2001 to 2014. For this purpose, the dynamic relationship, cointegration property, and error correction term are explored by DOLS, various cointegration tests, and ECM. The cointegration test also remarks the possibility of monetary policymakers to surprise the market in order to expect the increase in output. It also reconfirms that the interest rate tends to be a passive monetary instrument in curbing inflationary. Moreover, the adjustment process to the long-run of both output and price is found to have a symmetric cointegration property which implies the systematic ECM. The symmetric error correction test presents the significantly negative elimination in the next quarter towards long term equilibrium. The monetary policymakers thus seem to react to the rise in inflation uncertainty by keeping down inflation. Meanwhile, the output level tends to have faster adjustment speed than that of the price leve

Sustainable Development of Cassava Value Chain through the Promotion of Locally Sourced Chips

The benefits of using homegrown inputs in the production of processed agricultural products have been recognized, for example, in protecting the environment and generating local income. In Thailand, local fresh cassava can replace imported potatoes in the production of chips. However, chips made from local cassava are not widely available on the market. This market access difficulty could be because of insufficient information about consumers’ preferences. This study thus aims to address the factors determining people’s consumption decisions on locally sourced snacks in the case of chips made from Thai cassava. These factors include, for example, price, gender, generation, education, occupation, purchasing frequency, product attributes, nutrition, food safety, and an understanding of cassava chips. The questionnaire used was developed to elicit data related to these factors. The statistical analysis is undertaken by the probit model and marginal effect. The results of three estimated models with 19 independent variables show that the effects of generation and occupation significantly indicate the probability of preferring cassava chips. Having a higher level of education and coming from the northeastern part of the country seem to determine consumers’ preference for local cassava content. Moreover, a better understanding of the related issues implies a higher chance of favoring chips from the local cassava. Those findings would provide useful information for entrepreneurs and government agencies in promoting locally sourced chips, and further develop the higher value of the cassava supply chain

Volatility Spillovers and Contagion During the Asian Crisis: Evidence from Six Southeast Asian Stock Markets

Using a multivariate generalized autoregressive conditional heteroskedasticity (GARCH-M) model, we investigate volatility spillovers in six Southeast Asian stock markets around the time of the 1997 Asian crisis. We focus on interactions with the U.S. market as a world financial market, and with the Japanese market as a regional financial market. We also use bivariate GARCH-M models to examine the behavior of individual markets and their interactions with other markets in the region. All models lend support to the idea of the "Asian contagion," which started in Thailand and rapidly spread to other markets.Asian financial crisis, contagion, stock markets, time series models,

Stock Returns and the Macroeconomic Environment Prior to the Asian Crisis in Selected Southeast Asian Countries

This paper investigates the relationship between domestic macroeconomic variables and stock excess returns to evaluate the effects of macroeconomic variables on excess returns and assess market efficiency in the Southeast Asian economies prior to the 1997 Asian crisis. Based on various tests, monthly stock excess returns are best specified by autoregressive conditional heteroskedasticity-type models. The null hypothesis of a martingale process is rejected, and some macroeconomic variables are identified that seem to have a certain predictive power for excess returns. Moreover, it appears that Asian monetary authorities seem to have had a credibility problem in keeping inflation within a target range. The lack of credibility and transparency may have contributed to the 1997 crisis.Asian crisis, emerging markets, macroeconomic factors, stock returns,

Contagion or Real Linkages? Some Evidence from China's Emerging Parallel Markets

This paper empirically tests the existence of contagion using data on China's five parallel markets with different entry barriers for foreign capital. Taking the 1997 stock market crash as our experiment and using data on A, B and H shares, red chips and American depository receipts, the present paper tests whether these China-backed market returns respond differently to foreign shocks during the pre-1997 and post-1997 crash period. Evidence suggests that the contagion effects are stronger in markets with fewer entry barriers. An important implication of our findings is that countries vulnerable to contagion could be justified to impose some limits on capital flows. Copyright 2007 Institute of World Economics and Politics, Chinese Academy of Social Sciences.