International Capital Flows and Economic Adjustment in Thailand

In the two decades under study in this book, the relationship of developing countries like Thailand with the international financial markets went through a process of fundamental change which was accompanied by many shocks. The central question of this study is how these changes and shocks in the area of international finance have affected the rate and pattern of economic growth, the stability of the economy and the role and efffectiveness of economic policy.The central focus is on the interaction between international capital flows and domestic adjustment as reflected in investment, savings, and financial intermediation. Another important undertaking is the reassessment of the role of economic policy in these interactions. The study concludes that the recent high levels of foreign capital inflows have contributed to an acceleration of economic growth, but have also raised questions about the longer-run sustainability of the patterns of growth and about the reduced effectiveness of policy instruments.