Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth

May 1, 2008

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Shekhar Aiyar, and Ivan Tchakarov. Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth, (USA: International Monetary Fund, 2008) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

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

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/140
Stock No:

WPIEA2008140
ISBN:

9781451869989
ISSN:

1018-5941

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