Will Baht Depreciation Enhance the Standard of Living in Thailand?

ชื่อโครงการ :

แหล่งทุน :

Internal project

ปีที่ดำเนินโครงการ :

2544

รายละเอียด :

To stimulate economic development, Thailand applied a policy of export-led growth beginning in 1972. Then, following the 1997 economic crisis, the Thai baht depreciated dramatically. Now, those expecting the Thai baht to post even further losses hope to bail out the economy through boosting export revenue. The question is whether or not this policy will indeed produce economic recovery and raise the overall standard of living within Thailand. This paper uses a simple general equilibrium model to analyse macro trends and to forecast the impact of a depreciation of the Thai baht on the welfare of the population. Results indicate that if the baht depreciates further, prices on imports would increase, causing production costs to rise and the consumption of import goods and services to fall. Increased production costs would also cause consumption to slow. Although increased exports would bring increased revenues, they could not compensate for lower levels of consumption resulting from higher prices on consumer goods. The model presented in this paper indicates that the outcome of such a policy would be a net decrease in the overall standard of living within Thailand.