Macroeconomic Policy for Emerging Markets: Lessons from Thailand.

• Author: Amornkitvikai, Yot

Macroeconomic Policy for Emerging Markets: Lessons from Thailand, by Bhanupong Nidhiprabha. London: Routledge, 2019. Pp. 249.

Sound macroeconomic policies can be instrumental in promoting and sustaining a country's long-term growth. In the face of global fluctuations, countercyclical macro policies can be adopted to minimize the deviation from an economy's stable growth path. However, when such policies are based on false presumptions and/or hidden agendas, they can lead to catastrophic results.

The author, Professor Bhanupong Nidhiprabha, has more than forty years of experience in the field of macroeconomics, particularly international trade, which strengthens the theoretical and practical insights this book offers. Divided into thirteen chapters, his publication deals with a large number of interconnected aspects of the Thai economy, and the lessons that can be learned from the policymakers' successes and failures.

The first three chapters provide a comprehensive background of Thailand's economic development over the last fifty-five years, split into three periods: first, the early phase of steady growth between 1961 and 1990; second, the resilient period of 1991 to 2005, when the country endured macroeconomic adjustments in relation to external shocks; and third, the period of political turmoil from 2006 to 2017, when changes in political regimes and China's slowdown affected Thailand's long-term growth.

Drawing attention to Thailand's financial market, Chapters 4 through 6 focus on the banking sector. Highlighting the role of national banks in the Asian and Global Financial Crises, the author suggests that, despite the reforms that have already taken place, going forward, the Thai banking sector would need further large-scale adjustments, such as: strengthening rules and regulations; improving productivity and technology; and seeking higher revenues from non-interest income during periods of boom and bust influenced by external and internal shocks. On the development of the country's stock market, Professor Nidhiprabha points out that the stock market acts as a linking channel between the monetary and real sectors. Specifically, monetary expansion can enhance liquidity in the stock market and stimulate private investment and consumption. The empirical evidence in this book also suggests that the Bank of Thailand can implement a pre-emptive monetary policy before the stock market forms bubbles and generates ripples in the real sector.

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