Monetary policy, structural break, and the monetary transmission mechanism in Thailand

Heiko Hesse

No 4248, Policy Research Working Paper Series from The World Bank

Abstract: The paper studies monetary policy and the monetary transmission mechanism in Thailand in light of the Asian crisis in 1997. Existing studies that adopt structural vector auto-regression (VAR) approaches do not give a clear and agreed-upon view how monetary shocks are transmitted to the Thai economy that is subject to structural breaks. This study explicitly models a pre-crisis and post-crisis cointegrated VAR model. This analysis supports arguments that the trinity of open capital markets, pegged exchange rate regime, and monetary policy autonomy is inconsistent in the pre-crisis period. In contrast, the model points to an effective monetary policy in the post-crisis period. Further, the author analyzes the common driving trends of the model.

Keywords: Economic Stabilization; Economic Theory&Research; Macroeconomic Management; Fiscal&Monetary Policy; Financial Economics (search for similar items in EconPapers)
Date: 2007-06-01
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-sea
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Citations: View citations in EconPapers (5)

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Journal Article: Monetary policy, structural break and the monetary transmission mechanism in Thailand (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:4248

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