Contribution of International Trade and Capital Accumulation to Economic Growth of Thailand during the last half of the 20th century

Abstract

The present paper examines the links between international trade, capital and economic growth in Thailand from 1950 to 2000 in an applied growth model including exchange rate as a control variable. Prior to 1980 the elasticity of per capita income with respect to trade was -0.2% switching to 0.07% in 1980 in line with the change from resource exports and import substitution to manufactured exports. The exchange rate elasticity of per capita income prior to 1980 was 0.4% switching to -0.2% consistent with the move to a floating exchange rate. Results confirm the overriding theoretical importance of investment to economic growth