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Investment Cycles, Economic Recovery and Monetary Policy

Author

Listed:
  • Roong Poshyananda Mallikamas

    (Bank of Thailand)

  • Yunyong Thaicharoen

    (Bank of Thailand)

  • Daungporn Rodpengsangkaha

    (Bank of Thailand)

Abstract

This paper seeks to answer two main questions. First, given a relatively small contribution of private investment to output growth at present, will the recovery of output be anemic? And second, if private investment is crucial to sustainable output growth, what more could Thailand do to enhance private investment at this juncture? The paper is organized into three chapters. Chapter I explores the movements or cycles of output and private investment over the past few decades and assesses the importance of private investment as a contributor to output growth. Not only so, this chapter provides insights into what took place during the 1990s, focusing in particular on the deterioration of investment efficiency in the period leading up to the 1997 crisis. Chapter II investigates the various determinants of private investment, specifically, returns on investment, cost of investment, availability of financing, and the “confidence” factor. It also provides forecasts of private investment based on a range of plausible scenarios of its determinants. Finally, Chapter III offers some policy suggestions for sustainable private investment growth.

Suggested Citation

  • Roong Poshyananda Mallikamas & Yunyong Thaicharoen & Daungporn Rodpengsangkaha, 2003. "Investment Cycles, Economic Recovery and Monetary Policy," Working Papers 2003-04, Monetary Policy Group, Bank of Thailand.
    • Handle: RePEc:bth:wpaper:2003-04
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    References listed on IDEAS

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    1. Nobuhiro Kiyotaki & Kenneth D. West, 1996. "Business Fixed Investment and the Recent Business Cycle in Japan," NBER Chapters, in: NBER Macroeconomics Annual 1996, Volume 11, pages 277-344, National Bureau of Economic Research, Inc.
    2. Disyatat, Piti & Vongsinsirikul, Pinnarat, 2003. "Monetary policy and the transmission mechanism in Thailand," Journal of Asian Economics, Elsevier, vol. 14(3), pages 389-418, June.
    3. Tobin, James, 1969. "A General Equilibrium Approach to Monetary Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(1), pages 15-29, February.
    4. Lederman, Daniel & Menendez, Ana Maria & Perry, Guillermo & Stiglitz, Joseph, 2003. "Mexican investment after the Tequila crisis: basic economics, "confidence" effects or market imperfections?," Journal of International Money and Finance, Elsevier, vol. 22(1), pages 131-151, February.
    5. Toh, Mun Heng & Ng, Wai Choong, 2002. "Efficiency of investments in Asian economies: has Singapore over-invested," Journal of Asian Economics, Elsevier, vol. 13(1), pages 52-71.
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    Cited by:

    1. Choon-Seng Lim & Vincent & Min B. Shrestha, 2009. "Investment in The SEACEN Countries in The Post-Crisis Era: Issues and Challenges," Research Studies, South East Asian Central Banks (SEACEN) Research and Training Centre, number rp77, June.
    2. Sra Chuenchoksan & Don Nakornthab, 2008. "Past, Present, and Prospects for Thailand’s Growth: A Labor Market Perspective," Working Papers 2008-07, Monetary Policy Group, Bank of Thailand.
    3. Peter Warr, 2009. "Poverty Reduction through Long-term Growth: The Thai Experience," Asian Economic Papers, MIT Press, vol. 8(2), pages 51-76, Spring.
    4. Peter Warr, 2011. "Thailand’s Development Strategy and Growth Performance," WIDER Working Paper Series 002, World Institute for Development Economic Research (UNU-WIDER).
    5. Bruno Jetin, 2012. "Distribution of income, labour productivity and competitiveness: is the Thai labour regime sustainable?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(4), pages 895-917.
    6. Lathaporn Ratanavararak, 2018. "The Impact of Imperfect Financial Integration and Trade on Macroeconomic Volatility and Welfare in Emerging Markets," PIER Discussion Papers 79, Puey Ungphakorn Institute for Economic Research.
    7. Evren Erdoğan Coşar, 2012. "Analysis of cyclical behaviour of investment expenditures for the Turkish economy," Applied Economics Letters, Taylor & Francis Journals, vol. 19(13), pages 1213-1221, September.
    8. Peter Warr, 2011. "Thailand's Development Strategy and Growth Performance," WIDER Working Paper Series wp-2011-002, World Institute for Development Economic Research (UNU-WIDER).

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