Chapter 1
Understanding the Historical Role of Private Investment
1) What do output cycles look like in Thailand over the past 4-5 decades
2) Given those output cycles, how many important has private investment been
as a source of output growth
3) Provide that private investment contributes significantly to output growth,
what do we know about previous private investment cycle
4) To make the present recovery a quality one, what key lessons have been
learned from experience
1) Output cycles
known to be persistent features of market-oriented economies and the
analysis of business cycles offers a useful starting point for the understanding
of historical economic behavior
2) Private investment : Cycles and Contributions to Output Growth
- Since 1966 output and private investment cycles have moved together except
when output hit a trough in 1975
- In percentage deviation from trend, private investment fluctuates by about four
times as much as output
- Cycles have become longer and more volatile, and recessions have gotten
increasing deeper
- The expansion phase of 1987-1996 was strikingly long
What factors is a contributor to output growth?
- Private consumption
- Private investment ( asymmetric between expansion and recessions )
- Government spending
3) Salient Features of Past Private Investment Cycles
-
Cycles 1
Cycles 2
Cycles 3
Cycles 4
( 1956-1961 )
( 1962-1976 )
( 1977-1986 )
( 1987-1998 )
Investment Cycles, Economic
Recovery, and Monetary Policy
Chapter 2
Investment Determinants
Theoretical Underpinning and
Quick look at the figure
Key for Investment
• The rate of return on investment
• Cost of investment
• Investor’s confidence
A. Theoretical foundation of
Investment Decision
= Cost of Capital
= Share of capital in a simple
Cobb-Douglas production
q-Theory of Tobin
l
is gross investment
K is net capital stock
q is the Tobin’s q value
is a strictly positive
parameter
B.
Chapter 3
Policies and Private Investment
Influence of Monetary Policies
• The promotion of sustainable private
investment growth.
• Monetary policy support economy to the
right direction.
Sustainable Output Growth Throught
Sustainable Private investment
• Appropriate Monetary Policy Framework.
• Enhancement of Returns on Investment.
• Structural Reforms to Remove Impediment
to Private Investment Growth.
Appropriate Monetary Frame work
• Use flexible exchange rate.
• Benefit from using flexible rate.
Enhancement of Returns on
Investment.
• The key to promote new investment.
• What can we benefit from improvement?
Structural Reforms to Remove Impediments
to Private Investment Growth.
• Attract foreign investment.
• Bribing and corruption.
• Information.
Conclusion
The End
Thank You
For
Your Attention.