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Journal Article
The mechanics of a successful exchange rate peg: lessons for emerging markets
To the surprise of many market watchers, Thailand?s exchange rate peg to the dollar collapsed in July 1997, leading to similar rounds of currency devaluations in other East Asian countries. This study seeks to determine whether there were identifiable contrasts in implementation between Thailand?s peg and a perennially successful peg?Austria?s peg to the Deutsche mark?that would have hinted at problems for Thailand prior to July 1997. The comparison suggests that Thailand was not sufficiently vigilant about keeping its inflation rate low in the early 1990s. By 1995, Thailand faced a situation ...
Journal Article
East Asia: recovery and restructuring
Journal Article
Understanding the Korean and Thai currency crises
This article reviews and interprets the recent currency crises in Korea and Thailand. The authors argue that a prime causes of the crises were large, unfunded government guarantees to railing financial sectors.
Journal Article
After the Asian financial crisis: can rapid credit expansion sustain growth?
In the years following the Asian financial crisis of 1997-1998, the governments of South Korea and Thailand each have sought to generate economic recovery by expanding domestic credit. The rapid credit expansion in both countries has created concerns about the extent to which their economies can channel these funds efficiently and sustain economic growth. In particular, if banks are unable to supervise the allocation of resources effectively, there is a risk of widespread bankruptcies and a financial system crisis. Previous experience shows that these Asian economies indeed may be at risk of ...
Journal Article
Do capital controls affect the response of investment to saving? evidence from the Pacific Basin
This paper examines the effect of capital controls on the response of investment to savings in Pacific Basin countries. A robust finding is that the size of the savings coefficient tends to be smaller (larger) in countries with relatively higher (lower) capital controls. Additionally, relaxation in capital controls for the most part had no discernible impact on the savings- investment relationship in individual country time-series regressions. At least a partial resolution to these puzzles is found in the government policy response: Countries with a relatively high saving-investment ...
Journal Article
Responses to capital inflows in Malaysia and Thailand
Journal Article
The credit risk-contingency system of an Asian development bank
This article offers a new method for the evaluation of financial institutions, one that combines socioeconomic survey data with appropriate accounting standards. A government-operated development bank in Thailand is found to be offering a risk-contingency or insurance system while being regulated as a more standard, loan-generating bank. Farmer clients experiencing adverse shocks receive indemnities that improve their well-being. With proper provisioning and accounts, that welfare gain could be weighed against premia or government subsidies.
Working Paper
Portfolio choices and risk preferences in village economies
We use a model of optimal portfolio choice to measure heterogeneity in risk aversion among households in Thai villages. There is substantial heterogeneity in risk preferences, positively correlated in most villages with alternative estimates based on a full risk-sharing model.