Journal of Advances in Economics and Finance

Is Currency Depreciation or More Government Debt Expansionary? The Case of Thailand

Download PDF (184.1 KB) PP. 236 - 243 Pub. Date: November 7, 2017

DOI: 10.22606/jaef.2017.24004

Author(s)

Yu Hsing^*
Department of Management & Business Administration, College of Business, Southeastern Louisiana University, Hammond, Louisiana, United States

Abstract

Applying the aggregate demand and aggregate supply (AD/AS) model and based on a quarterly sample during 2001.Q1 – 2016.Q3, this paper finds that real GDP in Thailand has a positive relationship with the real effective exchange rate, government debt as a percent of GDP, labor productivity, the real oil price and a negative relationship with the real interest rate, real labor cost and the expected inflation rate. Hence, real appreciation of the Thai baht and sustainable increase in government debt as a percent of GDP would raise aggregate output.

Keywords

Exchange rate, government debt, labor productivity, labor cost, oil prices

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