The Social Sciences

Year: 2016
Volume: 11
Issue: 21
Page No. 5275 - 5279

Evaluation of Bangkok Bomb by Long-Run Macro-Economic Model

Authors : Bundit Chaivichayachat

Abstract: The aim of this study is to construct a long-run relationship macro-economic model for Thai Economy and to apply the estimated model to evaluate the impact of Bangkok bomb on Thai economy. A structural model was set up by employing a national account system and balance of payments. There are 6 groups of equations in the structural model including domestic demand, aggregate supply, financial market, external sector, price adjustment mechanism and macroeconomic policy. The structural model consists of 16 behavioral equations and 12 identities. Each behavioral equation was assigned to find the cointegrating vector following the method of Johansen system cointegration test. Using the quarterly data during 1993-2015, the long-run relationship among the variable in each behavioral equation were estimated. All of the behavioral estimated equations in the model can be used to explain each part of Thai economy with statistical significance. The results of the ex-pose stochastic simulation and the Thiel’s inequality coefficient indicate that the estimated model can capture the behavior of endogenous variable properly. It is only 7.4% of the error were generated. For the application, the estimated long-run macroeconomic model for Thai economy was employed to evaluate the impacts of Bangkok bomb. A seriously bomb in the middle of Bangkok in the early night of 17 August 2015 caused the number of foreign tourists and the foreign tourism revenue declined and slowdown output growth.

How to cite this article:

Bundit Chaivichayachat , 2016. Evaluation of Bangkok Bomb by Long-Run Macro-Economic Model. The Social Sciences, 11: 5275-5279.

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