Abstract:
The main purpose of this thesis was to study the factors that had impact on the demand of Thai import and export demand, comparing before and after floating exchange rate : January 1995 - June 1997 and July 1997 - December 1999. Factors under investigations were real income, relative price, real effective exchange rate, import in previous month and export in previous month. The elasticities of these variables were also analyzed.The study found that the import demand during the fixed exchange rate depended on real income and relative price. However, relative price showed greater influence. The implication of this finding was that the price policy was more effective than the income policy to control Thailand's import.During the managed floating exchange rate, this study founded that factors affecting Thailand's import demand were real income, relative price and import in previous month. However, relative price had the strongest impact. This result impliedthat price policy was the most effective policy variable to control the import of the country.Comparing the import demand before and after the floating exchange rate, Thai government should use price policy to control import.In the fixed exchange rate, relative price was the most important factor effecting export demand of Thailand. This finding implied that price policy was the most effective instrument to promote Thailand's export.During the managed floating exchange rate regime, it was founded that factors influencing Thailand's export demand were real income and export in previous month, While export in previous month indicated more impact. This finding implied that export in previous month policy was more effective than income policy for Thailand's export promotion policy.Comparing the export demand before and after the floating exchange rate, government should use price policy before the floating exchange rate while after the floating exchange rate, government should consider using export in previous month policy to stimulate Thailand's export.