Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions
This paper examines the long-run relationship between exchange rate and its determinants based on the flexible-price monetary model. Multivariate cointegration approach (Johansan 1988, 1989 and Johansen-Juselius 1990) is adopted to attain our objective of study. The empirical results provide evidenc...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
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Universiti Malaysia Sarawak (UNIMAS)
2008
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| Online Access: | http://ir.unimas.my/id/eprint/3221/ http://ir.unimas.my/id/eprint/3221/1/Monetary%20model.pdf |
| _version_ | 1848835165741121536 |
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| author | Liew, Venus Khim-Sen Ahmad Zubaidi, Baharumshah Puah, Chin-Hong |
| author_facet | Liew, Venus Khim-Sen Ahmad Zubaidi, Baharumshah Puah, Chin-Hong |
| author_sort | Liew, Venus Khim-Sen |
| building | UNIMAS Institutional Repository |
| collection | Online Access |
| description | This paper examines the long-run relationship between exchange rate and its determinants based on the flexible-price monetary model. Multivariate cointegration approach (Johansan 1988, 1989 and Johansen-Juselius 1990) is adopted to attain our objective of study. The empirical results provide evidence favoring the monetary approach to exchange rate for a small and open emerging economy, namely Thailand. In addition, the validity of the underlying assumptions of the monetary approach to the determination of exchange rate is established. The above findings suggest that exchange rate players may effectively monitor and forecast the exchange rate movement via the money supplies, incomes, and interest rates variables of both Thailand and Japan. Besides, one has to follow the economic development of Thailand’s major trading partner, Japan, to understanding the movement of exchange rate for Thailand. Moreover, our findings add new insights to accompaniment previous studies that documented the important influence of US in the emerging Asian economies. |
| first_indexed | 2025-11-15T06:03:32Z |
| format | Working Paper |
| id | unimas-3221 |
| institution | Universiti Malaysia Sarawak |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T06:03:32Z |
| publishDate | 2008 |
| publisher | Universiti Malaysia Sarawak (UNIMAS) |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | unimas-32212022-01-13T08:08:12Z http://ir.unimas.my/id/eprint/3221/ Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions Liew, Venus Khim-Sen Ahmad Zubaidi, Baharumshah Puah, Chin-Hong AC Collections. Series. Collected works HG Finance HJ Public Finance This paper examines the long-run relationship between exchange rate and its determinants based on the flexible-price monetary model. Multivariate cointegration approach (Johansan 1988, 1989 and Johansen-Juselius 1990) is adopted to attain our objective of study. The empirical results provide evidence favoring the monetary approach to exchange rate for a small and open emerging economy, namely Thailand. In addition, the validity of the underlying assumptions of the monetary approach to the determination of exchange rate is established. The above findings suggest that exchange rate players may effectively monitor and forecast the exchange rate movement via the money supplies, incomes, and interest rates variables of both Thailand and Japan. Besides, one has to follow the economic development of Thailand’s major trading partner, Japan, to understanding the movement of exchange rate for Thailand. Moreover, our findings add new insights to accompaniment previous studies that documented the important influence of US in the emerging Asian economies. Universiti Malaysia Sarawak (UNIMAS) 2008 Working Paper NonPeerReviewed text en http://ir.unimas.my/id/eprint/3221/1/Monetary%20model.pdf Liew, Venus Khim-Sen and Ahmad Zubaidi, Baharumshah and Puah, Chin-Hong (2008) Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions. [Working Paper] |
| spellingShingle | AC Collections. Series. Collected works HG Finance HJ Public Finance Liew, Venus Khim-Sen Ahmad Zubaidi, Baharumshah Puah, Chin-Hong Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title | Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title_full | Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title_fullStr | Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title_full_unstemmed | Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title_short | Monetary Model of Exchange Rate for Thailand: Long-run Relationship and Monetary Restrictions |
| title_sort | monetary model of exchange rate for thailand: long-run relationship and monetary restrictions |
| topic | AC Collections. Series. Collected works HG Finance HJ Public Finance |
| url | http://ir.unimas.my/id/eprint/3221/ http://ir.unimas.my/id/eprint/3221/1/Monetary%20model.pdf |