Date of Award
Doctor of Philosophy (PhD)
Economics / Economic Policy
Professor F.T. Denton
The main purpose of this thesis is to design and estimate a macro-econometric model for Thailand. It is intended that the model should be able to explain economic growth and development of the Thai economy; to provide estimates of structural parameters; to examine the relationships among major economic variables; to calculate multiplier effects of specific changes in government policies and other exogenous variables; to make conditional forecasts and policy simulations; and to assist in macro-economic policy planning.
A two-sector model is developed in order to highlight the dichotomy between agriculture and non-agriculture. It draws on aspects of both the Keynesian and neoclassical approaches to obtain demand and supply curves for both final and intermediate products, within a consistent general equilibrium framework.
The model also incorporates some important features of the Thai economy which are generally neglected in other models. Among these are: the dualistic character of production in the agricultural and non-agricultural sectors; the migration of labour from rural areas to the fast-growing urban sector; and the outflow of savings from the rural to the urban sector. Another important feature is the explicit linkage of the government budget constraint, the foreign trade and foreign exchange markets, and the domestic money market. The linkage is important in providing a built-in stabilizing mechanism in the real economy.
The model is estimated by a simultaneous equations estimation procedure, and is tested for its stability as well as its forecasting ability by historical simulations over the period of study (1960-1978). According to the tests, the model performs reasonably well for most variables.
The model is then used to assess the effects which alternative hypothetical measures would have had on the Thai economy over the historical period. The experiments provide reasonable quantitative answers on the effects of fiscal, monetary and exchange rate policies. For example, devaluation improved the balance of payments, generated higher levels of output, consumption and investment with high inflationary pressure. The results of transferring government investment from the non-agricultural to the agricultural sector suggest that there has been underinvestment in agriculture. The policy also improved income distribution and increased real wages.
Thamrongvech, Suchart Thada, "A Macro-Econometric Model of Thailand" (1983). Open Access Dissertations and Theses. Paper 1324.