Abstract:
The purpose of this thesis was to study causes of Thailand's trade instability during the period 1967-1982. A measurement of direct effects on the economy is income terms of trade. This analysis was principally divided into two steps: the first one dealt with macro analysis, and the second dealt with micro analysis. From the results of macro analysis, it was found that instability of Thailand's trade was mainly caused by supply fluctuations or variations in domestic production, demand variations seemed to be minor cause. This conclusion could be drawn from the fact that a large proportion of Thailand's exports consisted of stable food items for necessary consumption, and demand for these exports appeared to be relatively stable. From the analysis of causes of fluctuations in the commodity terms of trade was neither the result of fluctuation in export price index nor the fluctuation in import price index but mainly from fluctuations in both export price index and import price index in the same direction. From micro analysis, it was found that extremely unstable commodities in the income terms of trade were sugar, followed by textile products, canned pineapple, rubber, rice, frozen shrimp, tin, maize and tapioca products respectively. Fluctuations in domestic supply were the main cause of fluctuations in trade of each seven commodities including rice, tin, tapioca products, frozen shrimp, sugar, textile products and canned pineapple. Among these commodities-sugar, textile products and canned pineapple were commodities with high instability of the income terms of trade. These products are agro-industry products that depended on agricultural intermediate products and domestic raw materials. Therefore, causes of fluctuations in industrial products were mainly caused by low quality and uncertainty of the main raw material supply. However, in case of two other commodities- rubber and maize-fluctuations in demand were the reasons of fluctuations in their trade. For most of Commodities, fluctuations in supply and demand were additive rather than offsetting in producing the fluctuations in trade of each individual commodity. Fluctuations in the supply of and the demand for rice and tapioca products were offsetting each other and resulted in lower degree of trade fluctuation. From the decomposition of causes of trade instability for major exports, it was found that 96 percent of the variance of the quantity of exports was separately the result of variation of quantities of in - dividual commodity group. The remaining 4 percent was the result of combined effects of quantities of the same direction at about the same time. Rice, sugar and tapioca products were the most influential products producing fluctuations in the quantities of the major exports. However fluctuations decreased for three commodities-maize, rubber and tin. From the analysis of causes of fluctuations in commodity terms of trade, it was found that 63 percent of the variance was the result of variation of prices of individual commodity groups. The remaining 37 percent was the result of combined price effect of various commodities moving in the same direction at about the same time. Rice, sugar and rubber were the most influential products producing fluctuations in commodity terms of trade. However, there were .two commodities-frozen shrimp, textile products-whose fluctuations were decreased.