This paper offers a justification for and assurance of the efficiency of a monetary policy design that is based on using core inflation as the policy target. Illustrated in a New Keynesian framework where the microeconomic foundation with rigidities of various types is the central feature, the...

This paper attempts to provide some facts about the current environment where inflation seems to be originating from supply-side factors. It aims in particular to answer whether or not there is a role for monetary policy to contain such inflation and, if yes, how. From this study, it is found...

Given that rainfall is externally provided by nature and that it is also correlated with rural income, rainfall shocks seem to be the perfect instrument, as adopted in a popular interpretation of Paxson (1992). However, there are two problems with this reinterpretation: weak instruments and...

This paper looks at the implications of uncertainty in potential output estimation for the conduct of monetary policy. Our findings of potential output and the output gap for Thailand are based on commonly used methods such as the Hodrick-Prescott filter and unobserved component models....

This paper presents the Bank of Thailand’s new model based on the dynamic stochastic general equilibrium (DSGE) paradigm. The paper details the model structure of a small open economy, model parameterization, and model properties. The purpose of this DSGE model is to provide a coherent...