Did Fiscal and Monetary Policies Affect Positively to Economic Activity of Thailand?

Abstract

The purpose of this paper is to analyze fiscal and monetary policy impact to Thai economy in past twenty years. Although there are many papers to study about Thai economy, few paper analyzed not only monetary shock but also fiscal stimulus effect. In order to analyze the performance of monetary and fiscal policies, we constructed SVAR model using quarterly data from 2000 to 2017, and estimated the impact of monetary and fiscal policy. According to the results from SVAR model, it was found that shocks from monetary policies such as interest rate or money supply did not have significant effect in statistically for GDP growth rate. In the other hand, shocks of government expenditure had statistically significant positive effect to GDP growth, however this effect did not have long-term effect.

Keywords: Time-Series Data, SVAR, Monetary Policy, Fiscal Policy