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Investment Cycles, Economic Recovery and Monetary Policy


  • Roong Poshyananda Mallikamas

    (Bank of Thailand)

  • Yunyong Thaicharoen

    (Bank of Thailand)

  • Daungporn Rodpengsangkaha

    (Bank of Thailand)


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

    1. 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.
    2. 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.
    3. 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.
    4. 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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