On a comprehensive case for Managed Floating in Thailand: How much “managed” and how much “floating”?
AbstractThis paper searches for an appropriate exchange rate regime and provide a broad guideline for exchange rate management for Thailand in the medium term. An appropriate exchange rate regime is defined to be a credible regime that is most desirable. Our findings are in agreement with the flexible exchange rate view, but not freely floating. Flexible exchange rate is associated with higher long-term growth and lower inflation on average. We find that a Fix- Flex hybrid is desirable for Thailand from the point of view of shock absorbance. The vital consideration for credibility in the medium run decides in favor of leaving much of the decisions to the market, that is more Flex than Fix. Specifically, we advocate a Fix-Flex hybrid along the line of the Adjustable Basket and Band (ABB) plus inflation targeting. This type of managed float entails a trade-based basket design that allows the nominal effective exchange rate (NEER) to float within a relatively wide and adjustable band that incorporates an allowance for productivity improvement and inflation differential over time, all unannounced, combined with inflation targeting as anchor for nominal expectations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economic Research Department, Bank of Thailand in its series Working Papers with number 2004-07.
Length: 41 pages
Date of creation: Sep 2004
Date of revision:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pym Manopimoke).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.