Thailand and The World Economy

On The Effect of Money on Growth within an Optimal Control Framework

2024-12-19T11:09:11+07:00

This study addresses a gap in the monetary policy literature by examining the dynamic relationships between money supply, the money-interest rate sensitivity parameter, and key economic indicators, including consumption, money demand, capital, price, and interest rates, using an optimal control framework and Hamiltonian approach. Crucially, the model incorporates money as a factor in the Cobb-Douglas production function, alongside capital and labor, and as a component of the utility function, to offer a holistic view of money's role in the economy. The key findings derived from the simulation results show a positive relationship between money supply and capital, confirming that monetary expansion can stimulate economic growth. It also reveals an inverse relationship between the money supply and price after the initial interval, which contradicts the traditional inflation expectations of the Quantity Theory of Money. Furthermore, the study identifies that when the money-interest rate sensitivity parameter is set high, it exhibits volatile dynamics across all the variables. Therefore, while expansionary monetary measures can stimulate economic growth, policymakers must design optimal levels of money supply and money-interest rate sensitivity parameters to achieve economic stability and growth.

Sustainable Forestry Conservation through Community Participation: Insights from Dong Hua Sao National Park, Lao PDR

2025-07-03T15:34:31+07:00

This study investigates the role of community participation in sustainable forestry conservation in Dong Hua Sao National Park, Lao PDR, using Structural Equation Modeling (SEM). Data were collected from 748 households across five villages, selected through stratified random sampling based on socio-economic diversity. Robustness checks using ordinary least squares (OLS) regression confirm the consistency of these results across methods. Results show that villagers’ participation significantly enhances forest resource management (β = 0.919, p < 0.001) and indirectly contributes to sustainable conservation outcomes (β = 0.684, p < 0.01). Confirmatory factor analysis confirmed the reliability and validity of the constructions. A supplementary robustness check using multiple regression supported the SEM findings. These results highlight the critical role of community engagement in strengthening conservation practices and ensuring the sustainability of protected areas. The study provides policy implications for participatory conservation strategies in Lao PDR and offers insights for comparative research in other protected areas across Southeast Asia.

The Role of Human Capital and Export Diversification in the Growth Performance of Emerging and Developing Asian Countries

2026-01-05T11:29:41+07:00

Using balanced panel data of 14 emerging and developing Asian countries over the period 1980-2013, this paper examines the importance of human capital in the relationship between export diversification, margins, and growth. Estimates from the Arellano-Bond panel GMM estimator reveal that at the aggregate level, export concentration has a positive impact on economic growth. The interaction coefficient between export diversification and human capital reveals that a higher level of human capital magnifies the positive impact of export concentration on growth. At the margin level, we found that the intensive margin of concentration has an overall positive impact on growth. The interaction coefficient between the extensive margin and human capital reveals that a higher level of human capital magnifies the positive impact of the extensive margin of diversification on growth. The complementarity between the intensive margin of diversification and human capital in impacting growth is inconclusive. Our findings are robust when an alternative estimate, such as the fixed effects estimator, is used. We also assess the credibility of statistical conclusions by testing whether the estimated relationships are sensitive to the choice of the dependent variable. Similar outcomes are obtained when growth in GDP per capita is used as an alternate indicator of economic growth in place of GDP growth. To fully benefit from knowledge spillovers within the framework of growth returns from international trade, it is recommended that policymakers in the sampled countries focus more on the development of their human capital.

Predicting Informal Loans Using Machine Learning Algorithms

2025-04-15T08:04:58+07:00

This paper applies machine learning methods to predict informal borrowing participation and informal loan amounts in Thailand, using individual-level survey data covering approximately 4,800 respondents across six regions. We evaluate the performance of K-Nearest Neighbors (KNN), Random Forest, and Gradient Boosting (XGBoost) models and benchmark their predictive accuracy against a standard logistic regression. XGBoost achieves the highest accuracy in predicting informal borrowing participation, while Random Forest performs best in predicting loan amounts. To move beyond predictive performance, we incorporate interpretable machine learning tools to examine how key socioeconomic characteristics contribute to model predictions. Correlation and interpretability analyses reveal clear segmentation between formal and informal credit markets: households with lower income and limited access to formal loans face substantially higher informal borrowing costs. Our results show that accurate prediction is possible using a relatively small set of observable socioeconomic indicators. The findings highlight how interpretable machine learning can complement traditional economic analysis and provide practical tools for identifying households vulnerable to high-cost informal credit in data-scarce environments.

Geopolitical Risk and Central Bank Independence: Evidence from Inflation and Unemployment Dynamics in Developing Eight (D-8) Countries

2025-08-08T13:53:13+07:00

Recurring external shocks and domestic institutional constraints increasingly test macroeconomic stabilization in developing economies. This study examines how central bank independence (CBI) and geopolitical risk (GPR) shape inflation–unemployment dynamics in the Developing Eight (D-8) countries, Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan, and Turkey over 2012–2023. Using a two-step dynamic panel GMM approach with Windmeijer-corrected standard errors and collapsed instruments, we estimate multiple specifications for inflation and unemployment that incorporate monetary (interest rate, money supply), fiscal (public debt, government expenditure, tax revenue), and macro-structural controls (e.g., growth, productivity, oil prices), alongside governance and external-sector controls. The results suggest that conventional policy levers remain relevant but operate conditionally in D-8 settings characterized by import dependence, exchange-rate pass-through, shallow financial markets, and heterogeneous institutional credibility. Higher interest rates are associated with lower inflation but higher unemployment, while public debt is consistently linked to higher macroeconomic stress. CBI does not emerge as a uniformly strong direct determinant; instead, its role is more visible through policy-transmission channels, where stronger CBI can alter the effectiveness of interest-rate and fiscal actions. A salient finding is that GPR is often associated with lower inflation, consistent with an uncertainty-driven demand-contraction channel. At the same time, its labor-market effects appear more interaction-dependent (e.g., amplifying the unemployment implications of specific fiscal responses). Overall, the evidence indicates that stabilizing inflation and unemployment in D-8 economies requires credible monetary policy complemented by budgetary discipline and shock-resilience strategies, particularly during periods of elevated geopolitical uncertainty.

The Impact of Corporate Social Responsibility on Employee Satisfaction, Trust, Engagement and Commitment

2025-02-25T16:22:47+07:00

Employees are the most important resource for a company, contributing significantly to its survival and growth. Employee engagement with the company is an emotional factor that creates motivation and enthusiasm for work, serving as a foundation for improving business efficiency and competitiveness, while also enhancing the company's reputation and sustainable development. Conversely, how does the fulfillment of corporate social responsibility affect employee engagement with the company? This study investigates the impact of corporate social responsibility (CSR) on key variables related to employees in Hanoi, Vietnamese companies. Specifically, the study focuses on the relationship between corporate social responsibility and employee engagement with companies through the linking roles of employee satisfaction, trust, and commitment. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used on a sample of 455 employees of companies in Hanoi, Vietnam, to test several hypotheses. The results show that all proposed hypotheses regarding corporate social responsibility are appropriate and supported by employees in Hanoi, Vietnam. Corporate social responsibility is hypothesized to have an impact on satisfaction and trust, and these two variables have a positive impact on creating employee engagement and commitment to companies in Hanoi, Vietnam.

Economic Resistance and Recovery of Indonesian Regency/City During the COVID-19 Pandemic

2025-07-07T10:44:17+07:00

The COVID-19 pandemic severely disrupted Indonesia’s regional economies, exposing disparities in their ability to withstand and recover from shocks. This study explores the economic resilience of 514 regencies and cities across Indonesia during 2020–2022 by measuring two dimensions of resilience—resistance (ability to withstand contraction) and recovery (ability to rebound afterward). Using national socioeconomic and labor data, the analysis identifies key factors influencing regional resilience. The findings reveal that regions demonstrating stronger resistance during the crisis also tended to recover more rapidly. Income inequality and population size were found to weaken both resistance and recovery, while a higher share of workers using information and communication technology (ICT) enhanced post-pandemic recovery. These results highlight that improving digital inclusion and reducing income inequality are crucial policy priorities for strengthening regional resilience to future economic shocks. Strengthened coordination between central and local governments is essential to build a more adaptive and equitable economic structure nationwide.

Revisiting the Impact of Financial Crisis on the ASEAN- 5 Countries: Shock Amplification Perspective

2025-11-08T10:09:42+07:00

This study aims to revisit the impact of the Asian Financial Crisis (AFC) and Global Financial Crisis (GFC) in the ASEAN-5 countries from 1990 to 2020. By addressing the long-run economic trajectory, the size of shock amplification is manifested by the divergence of aggregate output from potential output in the business cycle due to an economic shock. This study utilizes Fully Modified Ordinary Least Squares (FMOLS), where the results indicate that both crises generated negative output gaps at the group level, with the Global Financial Crisis producing a substantially larger long-run deviation from potential output than the Asian Financial Crisis. The interaction analysis further shows that while monetary policy acted as a shock absorber during the Asian Financial Crisis, key macroeconomic variables, particularly trade openness and financial development, served as important channels of shock amplification during the Global Financial Crisis. At the individual country level, the results reveal pronounced heterogeneity in shock amplification across the ASEAN-5 economies. Indonesia experienced the largest amplification during the Asian Financial Crisis, whereas Singapore recorded the strongest amplification during the Global Financial Crisis. The results highlight that the differences in economic structure, financial exposure, and external integration shape the transmission and amplification of crises across countries and periods. Strengthening financial sector resilience and managing exposure to external trade shocks are crucial for reducing long-run output losses during future global financial disruptions.

The Uneven Gains of Progress: Investigating Total Factor Productivity and Human Capital Effects on Inequality in the sub-Saharan African Economies

2025-08-19T10:39:23+07:00

In a world shaped by rapid technological advancements and evolving human capital landscapes, the issue of income inequality stands as a critical challenge with far-reaching implications in sub-Saharan Africa (SSA). This paper investigates the impact of human capital and total factor productivity on a panel of 23 SSA economies from 1980 to 2019. The dynamic common correlated effect on the mean group (DCCE-MG) estimator deployed on a heterogeneous, large N and/or T panel data. Contrary to expectations, the findings indicate that the increase in human capital, technological advancements, and their interactions have exacerbated income inequality rather than reducing it. Human capital accumulation might suggest that the level of educational attainment has reached a plateau, with no significant increase or improvement in educational outcomes. The study recommends several policy measures, such as investing in affordable and quality education with integration of technological changes to strengthen human capital accumulation on reducing income inequality, and accomplish the Sustainable Development Goals (SDGs).