Monetary Policy in Thailand: How Effective?
This paper evaulates the effectiveness of monetary policy in Thailand over 25 years. Pegging the exchange rate meant the loss of control of domestic monetary policy - a contradiction in strategy and eventual disaster. The inability to 'sterilize' large capital inflows meant that asset price inflation was bound to surge and de-stabilize the economy. How well did the Bank of Thailand manage the economy during this period? To what extent were external factors to blame - such as China's growing competitiveness, contagion, world fund manager anxiety, $US strength to name a few. How well did the BOT manage the economy after the crisis? How did Thailand's economic performance match its neighbours since the crisis? Were lessons well learnt in the light of the 2007 capital restrictions? Or are old interventionist mistakes being made?
Keywords: Asset Price Inflation, Sterilisation, Large Capital Flows, External Factors, Policy Ineffectiveness
Dr. David Leslie Western
Senior Lecturer, School of Economics and Finance, Curtin University
There are two co-authors - Dr G Mac Donald and Miss Saranya Raksong (Ph D Student)
Prof. Garry MacDonald
Professor Garry MacDonald, Curtin Business School, Curtin University