Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions
Venus Liew (),
Ahmad Zubaidi Baharumshah () and
Chin-Hong Puah ()
Global Economic Review, 2009, vol. 38, issue 4, 385-395
This paper examines the long-run relationship between exchange rate and its determinants based on the flexible-price monetary model. The multivariate cointegration approach is adopted to attain our objective of this study. The empirical results provide evidence favoring the monetary approach to exchange rate for a small and open emerging economy, namely Thailand. In addition, the validity of the underlying assumptions of the monetary approach to the determination of exchange rate is established. The findings suggest that exchange rate players may effectively monitor and forecast the exchange rate movement via the money supplies, incomes, and interest rates variables of both Thailand and Japan. Besides, one has to follow the economic development of Thailand's major trading partner, Japan, to understanding the movement of exchange rate for Thailand. Moreover, our findings add new insights to accompany previous studies that documented the important influence of the US in the emerging Asian economies.
Keywords: Exchange rate; monetary model; Thailand; cointegration (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:taf:glecrv:v:38:y:2009:i:4:p:385-395
Ordering information: This journal article can be ordered from
Access Statistics for this article
Global Economic Review is currently edited by Kap-Young Jeong and Taeyoon Sung
More articles in Global Economic Review from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().