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Thailand, Financial Crisis And Monetary Policy

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  • Karel Jansen

Abstract

This article interprets the financial crisis that started in July 1997 in Thailand as a failure of monetary policy. The traditional policy regime of fixed exchange rate and high interest rates that had served Thailand well in the past, was inconsistent with the international mobility of capital in the 1990s. A better combination of exchange rate and interest policies will have to be established in order to contribute to the recovery and renewed growth. The article questions whether the inflation targeting now being considered will serve that purpose.

Suggested Citation

  • Karel Jansen, 2001. "Thailand, Financial Crisis And Monetary Policy," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 6(1), pages 124-152.
    • Handle: RePEc:taf:rjapxx:v:6:y:2001:i:1:p:124-152
    DOI: 10.1080/13547860020024567
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    References listed on IDEAS

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    1. Corsetti, Giancarlo & Pesenti, Paolo & Roubini, Nouriel, 1999. "What caused the Asian currency and financial crisis?," Japan and the World Economy, Elsevier, vol. 11(3), pages 305-373, October.
    2. Mr. Alejandro Lopez Mejia, 1999. "Large Capital Flows: A Survey of the Causes, Consequences, and Policy Responses," IMF Working Papers 1999/017, International Monetary Fund.
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    4. Giancarlo Corsetti & Paolo Pesenti & Nouriel Roubini, 1998. "What Caused the Asian Currency and Financial Crisis? Part II: The Policy Debate," NBER Working Papers 6834, National Bureau of Economic Research, Inc.
    5. Steven Radelet & Jeffrey Sachs, 1998. "The Onset of the East Asian Financial Crisis," NBER Working Papers 6680, National Bureau of Economic Research, Inc.
    6. Paul R. Masson & Miguel A. Savastano & Sunil Sharma, 2019. "The Scope for Inflation Targeting in Developing Countries," World Scientific Book Chapters, in: Macroeconomic Modelling and Monetary and Exchange Rate Regimes, chapter 10, pages 331-383, World Scientific Publishing Co. Pte. Ltd..
    7. McKinnon, Ronald I. & Pill, Huw, 1998. "International Overborrowing: A Decomposition of Credit and Currency Risks," World Development, Elsevier, vol. 26(7), pages 1267-1282, July.
    8. Corbo, Vittorio & Hernandez, Leonardo, 1994. "Macroeconomic adjustment to capital inflows : Latin American style versus East Asian style," Policy Research Working Paper Series 1377, The World Bank.
    9. Guy Debelle, 1998. "Inflation Targeting in Practice," Occasional Papers, South East Asian Central Banks (SEACEN) Research and Training Centre, number occ23.
    10. Sebastian Edwards & Miguel A. Savastano, 1999. "Exchange Rates in Emerging Economies: What Do We Know? What Do We Need to Know?," NBER Working Papers 7228, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Victor Pontines & Reza Y. Siregar, 2012. "Exchange Rate Asymmetry and Flexible Exchange Rates under Inflation Targeting Regimes: Evidence from Four East and Southeast Asian Countries," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 893-908, November.
    2. Jounghyeon Kim, 2012. "Monetary and Exchange Rate Policy in the Aftermath of the Asian Financial Crisis: The Case of Korea," Korean Economic Review, Korean Economic Association, vol. 28, pages 91-116.
    3. Siregar, Reza Yamora & Goo, Siwei, 2010. "Effectiveness and commitment to inflation targeting policy: Evidence from Indonesia and Thailand," Journal of Asian Economics, Elsevier, vol. 21(2), pages 113-128, April.
    4. Jansen, K., 2002. "The scope for fiscal policy : with examples from Thailand," ISS Working Papers - General Series 19127, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    5. Akhand Akhtar Hossain, 2015. "The Evolution of Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 14611.
    6. Gerardo Alfonso Perez, 2021. "Short-Term Event-Driven Analysis of the South-East Asia Financial Crisis: A Stock Market Approach," Economies, MDPI, vol. 9(4), pages 1-30, October.
    7. Nakavachara, Voraprapa, 2010. "Superior female education: Explaining the gender earnings gap trend in Thailand," Journal of Asian Economics, Elsevier, vol. 21(2), pages 198-218, April.

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