Applied Economics Journal

Applied Economics Journal

ISSN 0858-9291

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  • AEJ highlights the applications of concepts and theories to issues in micro- and macroeconomics
  • Double-blind peer review
  • Two issues a year (Jun, Dec)
  • Open access to all full-text content

Vol. 10 No. 1
Vol. 10 No. 1
Credit Crunch and Post-Crisis Economic Contraction: A Case of Thailand (in English)


Ponpoje Porapakkarn


This paper uses the monetary transmission mechanism to examine factors contributing to the credit crunch problem in Thailand. Six factors are illustrated here. Though question about whether there was a credit crunch after the 1997 crisis is still debating, this paper proposes that credit crunch should to be a question of degree, not whether there was or not. So this paper twists the question about the credit crunch to whether the premise that there was a credit crunch in Thailand can help explain the post-crisis economic contraction. The study uses Thai macroeconomic data to estimate two investment functions, one is from the conventional IS-LM model and the other is based on the credit crunch assumption. The estimation shows that the post-crisis investment was not influenced by interest level but was restricted by previous period debt burden. These findings are consistent with the prediction of the model based on the credit crunch assumption.

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Faculty of Economics Kasetsart University :  Center for Applied Economic Research (CAER) :  Other Journals :  Thai-Journal Citation Index Centre (TCI) (TCI)

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Kasersart University Journal of Economics
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