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Foreign Aid and Dutch Disease in Thailand

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  • Hiroaki Sakurai

Abstract

This paper examines the economic impact of foreign aid, specifically whether it leads to Dutch disease, in Thailand between 1972 and 2014, using a VAR model, together with the Granger causality test and the impulse response test. Few previous studies have been made of Southeast Asian countries even though Thailand has experienced rapid economic growth using foreign aid to construct infrastructure, and by introducing foreign direct investment into manufacturing industries. The causality and impulse response tests indicate that Dutch disease has not occurred; the impact of foreign aid proved positive, as there was little room to increase consumption and the aid contributed directly to capital accumulation.

Suggested Citation

  • Hiroaki Sakurai, 2017. "Foreign Aid and Dutch Disease in Thailand," Bulletin of Applied Economics, Risk Market Journals, vol. 4(2), pages 57-64.
    • Handle: RePEc:rmk:rmkbae:v:4:y:2017:i:2:p:57-64
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    References listed on IDEAS

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    Cited by:

    1. Hiroaki Sakurai, 2022. "Foreign Aid and Dutch Disease: The Case of Vietnam," Bulletin of Applied Economics, Risk Market Journals, vol. 9(2), pages 159-168.

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    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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