Papers by Pongsak Luangaram
Empirical Economics, 2021
This paper constructs various measures of domestic and global uncertainty and provides a comprehe... more This paper constructs various measures of domestic and global uncertainty and provides a comprehensive study of their impacts on the Thai economy. Based on a small open economy VAR, global uncertainty delivers deeper and more long-lasting effects when compared to within-country ones. In addition, we find that uncertainty shocks first generate sudden and large declines for stock prices and foreign portfolio investment, before gradually affecting the real economy through investment and trade channels. There is also meaningful heterogeneity among different types of domestic uncertainty. While financial uncertainty matters most for the Thai economy overall, consumption demand largely responds to macroeconomic uncertainty, while economic policy and political uncertainty generates the most persistent effects on investment. Furthermore, fiscal policy uncertainty is a key driver of trade flows while monetary policy uncertainty plays an important role for capital markets. Keywords Economic • Financial • Political • Policy • News-based • Uncertainty • Emerging market • Small open economy • Spillovers We would like to thank Patcharaporn Leepipatpiboon and Chaitat Jirophat for excellent research assistance. We also appreciate insightful and constructive comments by two anonymous referees. The views expressed in this paper are of the authors and do not necessarily reflect those of the Bank of Thailand.
Journal of Population Economics, 2012
This paper analyzes how the decisions of individuals to have children and acquire skills affect l... more This paper analyzes how the decisions of individuals to have children and acquire skills affect long-term growth. We investigate a model in which technical progress, human capital, and population arise endogenously. In such an economy, the presence of distortions (such as monopolistic competition, knowledge spillover, and duplication effects) leads the decentralized long-run growth to be either insufficient or excessive. We show that this result depends on the relative contribution of population and human capital in the determination of long-term growth, i.e., on how the distortions affect the trade-off between the quantity of offsprings and the quality of the family members.
This paper has two objectives. First, we assess the accuracy and the efficiency of inflation and ... more This paper has two objectives. First, we assess the accuracy and the efficiency of inflation and output growth forecasts. Second, we examine empirically the policy rate decision made by the Monetary Policy Committee (MPC) by focusing on the interaction between its economic projections and the policy response. Using publicly available information published in the inflation reports between July 2000 and July 2009, there is no significant evidence that the forecasts are not efficient. Under the pooling approach, systematic bias occurs in headline inflation forecast at 10% level but does not exist in GDP growth and core inflation projection. In addition, our empirical results confirm that monetary policy decision in Thailand has been made on the basis of own forecast with relatively strong degree of responsiveness to inflation forecast deviation from the target. Finally, we find that the response of change in the policy interest rate to forecast revisions is statistically significant but the degree of judgment on part of the MPC appears to be high in the policy setting.
SSRN Electronic Journal, 1998
Credit market imperfections have been blamed for the depth and persistence of the Great Depressio... more Credit market imperfections have been blamed for the depth and persistence of the Great Depression in the USA. Could similar mechanisms have played a role in ending the East Asian miracle? After a brief account of the nature of the recent crises, we use a model of highly levered creditconstrained firms due to to explore this question. As applied to land-holding property companies, it predicts greatly amplified responses to financial shocks -like the ending of the land price bubble or the fall of the exchange rate. The initial fall in asset values is followed by the 'knock-on' effects of the scramble for liquidity as companies sell land to satisfy their collateral requirements -causing land prices to fall further. This could lead to financial collapse where -like falling dominoes -prudent firms are brought down by imprudent firms.
Economic Journal, 2000
Collapsing credit markets have been blamed for the depth and persistence of the Great Depression ... more Collapsing credit markets have been blamed for the depth and persistence of the Great Depression in the USA. Could similar mechanisms have played a role in ending the East Asian economic miracle − and in creating fragility in global financial markets? After a brief account of the nature of the East Asian crises of 1997/8, we use the framework of highlyleveraged, fully-collaterised firms due to to explore the impact of a credit crunch. The paper emphasises the fragility of equilibrium and how rapidly boom can turn to bust. We highlight this by considering land-holding property companies and their vulnerability to adverse shocks − like the end of a property price bubble or a fall in the exchange rate. Even when substantial margins are held, the initial drop in net worth may be followed by powerful 'knock on' effects in the scramble for liquidity if companies are forced to sell land to satisfy collateral requirements − possibly leading to wholesale financial collapse.
SSRN Electronic Journal, 1999
Was the East Asian crisis just a creditor panic with a mad scramble for liquidity that brought th... more Was the East Asian crisis just a creditor panic with a mad scramble for liquidity that brought the banking system to its knees and the region's much-vaunted 'economic miracle' to a standstill? Or was the miracle indeed flawed by fundamental problems in asset prices and resource allocation? After a summary of the facts and an outline of various types of financial crisis, we conclude that the truth involves both factors, interacting in a vicious downward spiral. There certainly was panic among the creditors but it was triggered by genuine problems of overinvestment and overvaluation in emerging East Asian economies. Before turning to outline various approaches of crisis prevention and management and a brief account of the future prospects, we discuss how contagion can occur in environments where investors are poorly informed and each looks to the others for guidance. The paper ends with immediate steps that might help resolve the current crises; and with proposed reforms to the international monetary system to prevent a recurrence.
National Institute Economic Review, 1998
Was the East Asian crisis just a creditor panic with a mad scramble for liquidity that brought th... more Was the East Asian crisis just a creditor panic with a mad scramble for liquidity that brought the banking system to its knees and the region's much-vaunted 'economic miracle' to a standstill? Or was the miracle indeed flawed by fundamental problems in asset prices and resource allocation? After a summary of the facts and an outline of various types of financial crisis, we conclude that the truth involves both factors, interacting in a vicious downward spiral. There certainly was panic among the creditors but it was triggered by genuine problems of overinvestment and overvaluation in emerging East Asian economies. Before turning to outline various approaches of crisis prevention and management and a brief account of the future prospects, we discuss how contagion can occur in environments where investors are poorly informed and each looks to the others for guidance. The paper ends with immediate steps that might help resolve the current crises; and with proposed reforms to the international monetary system to prevent a recurrence.
Uploads
Papers by Pongsak Luangaram