Revisiting the Determinants of Thai Economic Growth: A Mixed Frequency Approach

Abstract

This paper aims to analyze the factors affecting the economic growth of Thailand. Even though this issue is uncomplicated and has already been discussed by many scholars, it is still important. In this study, we conduct an econometric analysis taking into account various key macro-economic factors that can play a significant role in expediting the Thai economic growth. However, these factors are normally recorded at different frequencies as monthly, quarterly, and yearly data. Thus, we suggest applying the mixed frequency regression approach namely U-MIDAS and R-MIDAS for the investigation using various time series data reported at different frequencies. This study uses mix-frequency variables of quarterly real GDP, and monthly unemployment, tourism, total export, government budget, and direct investment. The results show that the U-MIDAS model is more suitable than R-MIDAS. We find that export and government budget in the previous month shows the decisive evidence of affecting the economic growth in the current quarter, while the tourism in the previous month shows strong evidence of affecting the economic growth.