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Misalignment of the Baht and its Trade Balance Consequences for Thailand in the 1980s and 1990s

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Author Info
Ramkishen S. Rajan
Rahul Sen
Reza Y. Siregar

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Abstract

This paper examines Thailand's pre-crisis exchange rate policy, focusing on the degree of the country's real exchange rate misalignment pre-crisis and its consequent effects on Thailand's trade balance with its two large trading partners, the US and Japan, in the 1980s and 1990s. Defining misalignment as the difference between actual and 'equilibrium' exchange rates, we estimate three key 'equilibrium' exchange rates of the Thai baht: (a) the real effective equilibrium exchange rate of the Thai baht against its twenty-two major trading partners; (b) the bilateral real equilibrium exchange rates of the baht against the US dollar; and (c) the bilateral real equilibrium exchange rate of the baht against the Japanese yen. Copyright 2004 Blackwell Publishing Ltd.

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Article provided by Blackwell Publishing in its journal The World Economy.

Volume (Year): 27 (2004)
Issue (Month): 7 (07)
Pages: 985-1012
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Handle: RePEc:bla:worlde:v:27:y:2004:i:7:p:985-1012

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This page was last updated on 2009-11-22.


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