Thailand: Post-Crisis Rebalancing

2012 ◽  
Vol 11 (1) ◽  
pp. 1-26 ◽  
Author(s):  
Chalongphob Sussangkarn ◽  
Deunden Nikomborirak
Keyword(s):  
Economic Growth ◽  
Private Investment ◽  
The United States ◽  
Asian Financial Crisis ◽  
Fiscal Sustainability ◽  
Production Structure ◽  
Regional Trade ◽  
Public And Private ◽  
Regional Markets ◽  
Main Engine

Since the Asian financial crisis in 1997, Thailand has become highly dependent on exports as the main engine of economic growth. In 2008, the ratio of export to GDP was about 76.5 percent. The global economic crisis triggered by the sub-prime loans debacle in the United States has prompted Thailand to rethink its high dependence on export. This paper examines the options for external and internal economic rebalancing strategies for Thailand. External rebalancing will require Thailand to rely more on regional markets and less on the Western markets for its exports. The paper examines the possibility of promoting greater intra-regional trade and Thailand's regional trade strategies. As for internal rebalancing, the paper emphasizes the need to boost domestic public and private investment in terms of both quantity and quality to narrow the current saving–investment gap, bearing in mind the need to ensure fiscal sustainability. Finally, the paper examines broader rebalancing strategies that will help Thailand to become less dependent on exports. These include the need to (1) improve productivity; (2) increase economic efficiency; (3) deepen the production structure and create new dynamic industries; and (4) generate new growth poles.

scholarly journals Economic Growth, Public and Private Investment: A Comparative Study of China and the United States

2020 ◽  
Vol 12 (6) ◽  
pp. 2243
Author(s):  
Ibrahim Ari ◽  
Muammer Koc
Keyword(s):  
Economic Growth ◽  
Gross Domestic Product ◽  
Private Investment ◽  
The United States ◽  
Domestic Product ◽  
Public And Private ◽  
Macroeconomic Factors ◽  
Causal Relations ◽  
Sustainable Economic Growth ◽  
The U.S

Public and private investments play a central role in production functions by providing the required capital for development. There are many studies in the literature investigating the linear macroeconomic relations based on public and private investment in cross-country and country-specific analyses by focusing on various perspectives and methodologies. However, there is a gap in the literature in exploring nonlinear causal relations among public-private investment and economic growth, particularly in the U.S. and China, in order to comparatively discuss policy implementations and potential implications. To narrow the gap, this study investigates nonlinear causal relationships between public-private investment and gross domestic product in the U.S. and China, which are the largest economies comprising about 40 percent of the global gross domestic product (GDP) in 2018. These countries show a similar pattern in economic growth and implementing sustainable development goals, although they follow considerably different socio-economic regimes and fall into different development levels (i.e., developed and developing countries). Therefore, there should be a common underlying mechanism in macroeconomic factors that fosters economic development. In this regard, the motivation behind the study is to reveal a common, but hidden, behavior of the nonlinear causal relations of given macroeconomic factors in these countries to make recommendations about sustainable economic growth for policymakers. To this end, there are three main contributions of the paper. First, the research finds nonlinear dependencies in the related time series between 1960–2015, thereby nonlinear causality tests are performed to reach more reliable information than the linear causality. Second, the study formulates a feedback loop between public and private investment through economic growth, which indicates that public and private investment should stimulate each other directly or indirectly (i.e., through the GDP). Third, the direction of the causality does not affect sustainable economic growth as long as it exists directly or indirectly.

Public and Private Investment and Economic Growth: An Empirical Investigation

2018 ◽  
Vol 63 (2) ◽  
pp. 87-106 ◽  
Author(s):  
Garikai Makuyana ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Public Investment ◽  
Private Investment ◽  
Current Debate ◽  
Annual Data ◽  
Public And Private ◽  
Long Run ◽  
Short Run ◽  
Crowd Out

Abstract This paper provides new evidence to contribute to the current debate on the relative impact of public and private investment on economic growth and the crowding effect between the two components of investment in South Africa. Using annual data from 1970 to 2017, the study applies the recently developed Autoregressive Distributed Lag (ARDL)-bounds testing approach to cointegration. The study finds that private investment has a positive impact on economic growth both in the long run and short run, while public investment has a negative effect on economic growth in the long run. Further, in the long run, gross public investment is found to crowd out private investment, while its infrastructural component is found to crowd in private investment. The results of the study also reveal that both gross public investment and non-infrastructural public investment crowd out private investment in the short run. Overall, the study finds private investment to be more important than public investment in the South African economic growth process and that the importance of infrastructural public investment in stimulating private investment in the long run cannot be over-emphasized.

scholarly journals Revisiting the Relationship between Economic Growth and Government Size

2012 ◽  
Vol 2012 ◽  
pp. 1-8 ◽  
Author(s):  
Atrayee Ghosh Roy
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Government Expenditure ◽  
Private Investment ◽  
The United States ◽  
Simultaneous Equation ◽  
Series Data ◽  
Government Size ◽  
Government Investment ◽  
Government Consumption

The purpose of this paper is to explore the association between government size and economic growth in the United States using time-series data over the period 1950–2007. In particular, this paper examines the effects of two key components of government expenditure, namely, government consumption and government investment, on US economic growth. A simultaneous-equation model is used to deal with the problem of bi-directional relationship between government size and economic growth. The results suggest that an increase in government consumption slows economic growth, while a rise in government investment enhances economic growth. Furthermore, the results also show that government investment crowds out private investment. Therefore, the overall effect of total government expenditure on economic growth is ambiguous.

scholarly journals Theoretical analysis and relationship of government and private investment on economic growth and employment absorption

2021 ◽  
Vol 9 (3) ◽  
pp. 059-067
Author(s):  
M. Ramadhan
Keyword(s):  
Economic Growth ◽  
Theoretical Analysis ◽  
Natural Resources ◽  
Private Investment ◽  
Government Policies ◽  
Government Investment ◽  
Public And Private ◽  
Depth Analysis ◽  
Relationship Of ◽  
Poverty Levels

One of the goals to be achieved in developing public and private investment is to encourage economic growth and employment. Positive economic growth is needed because it means that it has driven faster economic growth and increased the absorption of Employment. This study aims to obtain an analysis of the theoretical relationship between government investment and private investment on economic growth and employment, especially in South Kalimantan Province as the object of research. South Kalimantan Province is one of the regions in Indonesia which has a large potential for natural resources. The method used in this research is to use Path Analysis and analysis of theoretical findings based on in-depth analysis of various literature studies and observations which are expected to prove that government investment and private investment affect employment and economic growth which in turn can affect poverty levels. . The results of the study are expected to obtain important theoretical findings that can contribute to the formulation of government policies.

scholarly journals Public and Private Infrastructure Investment and Economic Growth in Pakistan: An Aggregate and Disaggregate Analysis

2019 ◽  
Vol 11 (12) ◽  
pp. 3359 ◽  
Author(s):  
Javid
Keyword(s):  
Economic Growth ◽  
Private Investment ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Infrastructure Investment ◽  
Public Infrastructure ◽  
Reverse Causality ◽  
Public And Private ◽  
Infrastructure Investments ◽  
The Impact

This study investigates the relationship between infrastructure investment and economic growth at the aggregate and sectoral levels, namely, the industrial, agriculture, and services sectors for Pakistan over the period from 1972 to 2015. In contrast to earlier literature, we make a comparative analysis of the different composition of infrastructure investments, including public versus private investment and infrastructure investment in sub-sectors such as in power, roads, and telecommunication sectors. The long-run relationship is estimated using fully modified ordinary least squares (FMOLS) to address the problem of reverse causality. The main conclusion of this study is that both public and private infrastructure investments have positive but different effects on economic growth. In other words, the marginal productivities of private and public infrastructure investments differ across the different sectors of the economy. In most of the cases, public infrastructure investment has a larger impact on economic growth than private infrastructure investment. Two important policy implications emerge from this study, as follows: (1) The different elasticity estimates can be used by policy makers to quantify the impact of policies targeted at the specific sector and (2) the government should develop an enabled policy environment to attract private investment, with the consideration of structural characteristics of the various sectors. The involvement of the private sector in the provision of infrastructure would help to control the tight budgetary situation.

Impact of Public and Private Infrastructure Investment on Economic Growth: Evidence from India

2020 ◽  
Vol 12 (2) ◽  
pp. 119-138
Author(s):  
Nishija Unnikrishnan ◽  
Thomas Paul Kattookaran
Keyword(s):  
Economic Growth ◽  
Public Investment ◽  
Impulse Response Function ◽  
Decomposition Analysis ◽  
Private Investment ◽  
Infrastructure Investment ◽  
Public Infrastructure ◽  
Public And Private ◽  
Long Run ◽  
The Impact

Literature presents contradictory views regarding the impact of public and private investment on the economic growth of a country. India being a developing country, where the major share of investment is by public sector, the question which props up is what among public and private investment is contributing more towards the economic growth of the country. In this framework, the gross domestic product (GDP) can be fairly explained as a function of public infrastructure investment and private infrastructure investment. Johansen’s co-integration was used to test the long-run relationship between the variables over the period from 1961–1962 to 2016–2017. A vector error correction model (VECM) along with an impulse response function and variance decomposition analysis was done to measure the impact of public infrastructure investment and private infrastructure investment on the GDP. Based on the empirical evidence discussed earlier, it was evident that both public and private infrastructure investments have a significant impact on the economic growth of the nation. Findings which came up in this study correlate to majority findings of past literature that, when compared with public investment, it is private investment which is capable of giving a better impetus to economic growth.

scholarly journals Econometric Study of the Impact of Public and Private Investment on Economic Growth in Algeria during the Period (1970-2017)

2020 ◽  
pp. 58-69
Author(s):  
Hadjoudj Abdallah ◽  
TchiKo Faouzi
Keyword(s):  
Economic Growth ◽  
Error Correction ◽  
Correction Term ◽  
Public Investment ◽  
Unit Root Test ◽  
Private Investment ◽  
Bounds Testing ◽  
Public And Private ◽  
Percent Increase ◽  
The Impact

This article examines the impact of public and private investment on economic growth in Algeria covering the period from 1970 to 2017. By applying the Auto-Regressive Distributed Lag model (ARDL)-(bounds testing approach). The key findings of the study concluded that there is a long-run relationship between public and private investment and economic growth in Algeria. The result of the Augmented Dickey Fuller unit root test (ADF) showed that the variables are stationary at the level and at the first difference. In addition, the results of the cointegration test indicated that the variables are cointegrated and therefore have the ability to move together over the long term. The parsimonious error correction mechanism showed that private investment is significantly related to economic growth. The result indicated that a 1 percent increase in the present value of private investment, on average, stimulates economic growth by 0.09 percent. Similarly, the value of public investment is positively related to economic growth. On average, a 1 percent increase in public investment stimulates growth in Algeria by 0.05 percent. the results of short-run dynamics reveal that, the error correction term (ECM) is negative and significant (-0.54), which means that 54% of the disequilibrium will be adjusted annually.

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