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Abstract:The notion that more government expenditures can stimulate growth is controversial. The causation between government expenditures and economic growth in Thailand is examined using the Granger causality test. There is no cointegration between government expenditures and economic growth. A unidirectional causality from government expenditures to economic growth exists. However, the causality from economic growth to government expenditures is not observed. Additionally, estimation results from the least square method with lagged variables of economic growth, government expenditures and money supply show the strong positive impact of government spending on economic growth during the period of investigation.JEL Classification: H50; N15; O23

We explore the impact of inflation uncertainty on output growth in Thailand, an emerging market economy with moderate inflation. Inflation and output uncertainty are modeled in a bivariate constant conditional correlation generalized autoregressive conditional heteroskedastic (AR(p)-cccGARCH(1,1)) specification. We include the exchange rate in the mean equations, and use the headline and core inflation rates and industrial production to generate inflation and output uncertainty series. These series are then used in Granger causality tests to make inferences about the effect of monetary policy-induced inflation uncertainty. Causality tests show a positive relation from inflation to inflation uncertainty. Additionally, increased inflation uncertainty decreases output. These results are consistent with real costs associated with moderate inflation. Finally, we find no evidence that monetary policy reduced these costs.a sej_2062 291..308

This paper employ monthly data to examine the empirical relationship between oil price shocks and domestic inflation rate during 1993 and 2013. The results show that oil price, domestic or international, does not have the long-run impact on consumer prices. However, oil price shocks cause inflation to increase while oil price uncertainty does not cause an increase in inflation. Furthermore, inflation itself causes inflation uncertainty. The findings of this study encourage the monetary authorities to formulate a more accommodative policy to respond to oil price shocks.