Thailand's macroeconomic miracle: stable adjustment and sustained growth

Abstract

This study resulted from a World Bank study of macroeconomic policy reviewing the recent experience of 18 countries as they tried to maintain economic stability in the face of external economic shocks like rising international prices and interest rates. The project particularly focused on the periods 1974-79, 1980-82, and 1983-90. The authors describe the performance of Thailand's economy in recent decades as stunning--it has experienced rapid growth, declining poverty, and macroeconomic stability in a volatile economic and political environment. However, they soberly conclude that the Thai experience was short of miraculous inasmuch as other countries similarly situated and equally endowed could have adopted the same macroeconomic policies and achieved the same results. This book explains that the country's policymakers, most notably the conservative bureaucrats, held attitudes that caused Thailand to avoid major mistakes. This conclusion has broad implications for the world's economic history, namely that the destabilization experienced by other countries in reaction to external shocks was not a foregone conclusion; instead it was in part a consequence of those countries' own policy responses and could have been averted. Part 1 describes the economic and political setting for Thailand's macroeconomic achievement while Part 2 examines the shocks themselves and Thailand's adjustment to them.

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