Economic Growth Dynamics And Short-Term External Debt In Thailand

The paper examined the short- and long-run relationships between short-term external debt and economic growth in Thailand over the period 1970-2003. The ARDL-bounds test procedure to co-integration was used. Results reveal that real STED and real GDP are correlated positively and significantly as well as co-integrated. There is indirect Granger-causality from economic growth to short-term external debt for the consumption effects. There is evidence that economic growth, exchange rate, and international reserves are determinants of short-term external debt for Thailand. The prominence of exchange rates suggests that it may be used to correct for STED disequilibrium in Thailand. To our knowledge we are the first to uncover these results.