Monetary Policy in Thailand: How Effective?

Dr. David Leslie Western,
Prof. Garry MacDonald
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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
Stream: Economics and Management
Presentation Type: Paper Presentation in English
Paper: A paper has not yet been submitted.

Dr. David Leslie Western

Senior Lecturer, School of Economics and Finance, Curtin University
Perth, WA, Australia

Dr David Western has worked at Curtin University for 21 years and specializes in Asian Economic Development and US Stock Markets. He has published books in both fields and is currently writing a book on China.

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
Perth, Western Australia, Australia

Ref: I07P0686