Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth
May 1, 2008
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Summary
External demand was the main driver of growth in Thailand in 2006 and 2007. However, WEO projections indicate moderating foreign demand in 2008, with U.S. growth being revised downwards to reflect the turmoil in housing and credit markets, and high oil prices. While the share of Thai exports to the US has fallen in recent years, the US remains Thailand's largest export destination. We use a small structural model and Bayesian estimation to assess the possible impact of a U.S. slowdown on Thai growth. We find that a 1 percent slowdown in U.S. growth in 2008-relative to the baseline forecast-could have an upper-bound impact on Thai GDP growth of 0.9 percentage points.
Subject: Exchange rates, Inflation, Output gap, Real exchange rates, Real interest rates
Keywords: monetary policy, Phillips curve, WP
Pages:
18
Volume:
2008
DOI:
Issue:
140
Series:
Working Paper No. 2008/140
Stock No:
WPIEA2008140
ISBN:
9781451869989
ISSN:
1018-5941
