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Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth


  • Shekhar Aiyar
  • Ivan Tchakarov


External demand was the main driver of growth in Thailand in 2006 and 2007. However, WEO projections indicate moderating foreign demand in 2008, with U.S. growth being revised downwards to reflect the turmoil in housing and credit markets, and high oil prices. While the share of Thai exports to the US has fallen in recent years, the US remains Thailand's largest export destination. We use a small structural model and Bayesian estimation to assess the possible impact of a U.S. slowdown on Thai growth. We find that a 1 percent slowdown in U.S. growth in 2008-relative to the baseline forecast-could have an upper-bound impact on Thai GDP growth of 0.9 percentage points.

Suggested Citation

  • Shekhar Aiyar & Ivan Tchakarov, 2008. "Much Ado About Nothing? Estimating the Impact of a U.S. Slowdown on Thai Growth," IMF Working Papers 08/140, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/140

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    References listed on IDEAS

    1. Benjamin L Hunt, 2005. "Oil Price Shocks; Can they Account for the Stagflation in the 1970's?," IMF Working Papers 05/215, International Monetary Fund.
    2. Frank Schorfheide, 2000. "Loss function-based evaluation of DSGE models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(6), pages 645-670.
    3. Douglas Laxton & Andrew Berg & Philippe D Karam, 2006. "Practical Model-Based Monetary Policy Analysis; A How-To Guide," IMF Working Papers 06/81, International Monetary Fund.
    4. Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, September.
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    Cited by:

    1. Chayawadee Chai-anant & Runchana Pongsaparn & Kessarin Tansuwanarat, 2008. "Roles of Exchange Rate in Monetary Policy under Inflation Targeting: A Case Study for Thailand," Working Papers 2008-03, Monetary Policy Group, Bank of Thailand.
    2. Wojciech Maliszewski, 2010. "Vietnam; Bayesian Estimation of Output Gap," IMF Working Papers 10/149, International Monetary Fund.


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