21-Abstract.doc
Dissertation Title:
Three Essays on General Equilibrium Analysis of Economic Policy in Thailand
Author:
Wichayayuth Boonchit
Program:
School/Department:
Doctor of Philosophy Degree
Department of Economics
University:
Carleton University
Ottawa, Ontario
Canada
Year:
2007
Dissertation Advisors:
Professor Christopher Worswick at Carleton University
Professor Marcel Merette and Professor Yazid Dissou at University of Ottawa
Abstract
This thesis contains three chapters of general equilibrium analysis of economic policy in Thailand, which can be summarized as follows:
The first chapter is the static general equilibrium analysis of the impacts of oil prices shock and government subsidies. The results show that oil prices shock in 2004 lowers the GDP of the Thai economy by 0.14 percent and household welfare by Baht 26.67 billion (0.57 percent of GDP). The negative impact of oil prices shock on GDP can be alleviated by government subsidies while the negative impact on household welfare can be mitigated only when the cost of subsidies is financed by (i) the contraction of government consumption and (ii) the contraction of government consumption together with uniform direct tax rates increase. Nevertheless, subsidies policy is a regressive measure for income distribution.
The second chapter extends the analysis of oil prices shock to cover its dynamic transition. The results show that oil prices shock lowers GDP of the Thai economy by an approximately 1 percent in 2006-2007. The contraction of GDP is led by the reduction of investment and private consumption. Consumption price increases by 0.24 percent in 2004 before steeply rising to 1.5 percent in 2006 -2007. The net real-export increases and contributes positively to GDP in 2004. However, as the shock persists and accelerates, the
21-Abstract.doc
net real export decreases and reinforces the contraction of other GDP components. Household welfare decreases by 0.743 percent.
The third chapter is an analysis of the impact of trade liberalization in a revenue constrained economy. The results show that, without revenue compensation, the impacts of trade liberalization are consistent with the standard trade theory. In general, it raises GDP (0.036 percent) and household welfare by Baht 6.469 billion (0.139 percent of GDP). Government revenue decreases by Baht 20.829 billion (0.450 percent of GDP). In the context of a revenue constrained economy, the impacts of trade liberalization significantly differ from the case without revenue compensation. In all cases of revenue compensation, household welfare decreases and all tax measures are less efficient than tariffs.