0814 Thai economy Professor Bhanupong Nidhiprabha [email protected]

• be moodle code 3527

• similarity

• forced to open trade

  • 1859 japan (Meiji)
    • Nagasaki: japan's only door to world trade in 1571 castella, tempura (from portugal)

• difference

  • industralization Japan

  • progressive middle class (samurai)

  • Sent 6000~ students

  • emphsize science and engineering

  • initial export raw silk, tea, and marine products, later change to manufactured goods

  • less land supply

  • better monetary system

  • abundant labor

  • unilineal iye system

  • Meiji restoration redistribute income and oppotunity

  • get privite sector to be involved by transfer the factories

  • 1855 siam (King chulalongkorn)

    • Ayutthaya: foreigners accounts for quarter of residents. export forest products
    • red seal ship trade: government trading ships
    • 'Yamada Nagamasa': Japanese who becomes officer in Siam
    • King Prasart Thong 1629-1656 made royal monopoly trade
    • King Narai 1656-1688
    • primary product oriented rice, teak, tin, 'rubber'
    • history
      • old enemy burma disappeared but french was getting aggresvie from east colonial.
    • watershed: Sandwitch's bowring treaty 1855 (King Mongkut): british trade freely; 3% of all things except gold bullion and oppium; siam gov keep the right on prohibit export salt, rice, fish to keep these necessities price low
    • other countries follow the pattern
    • the export item didnt change until 1960 (top 3 : rice, tin, teak)
      • removal forest make rice produce more productive
    • abundant supply of land make industrilzation less attractive
    • low emphasis on infrastructure and edu
    • fatalistic middle class
    • 1850-1950 GNP barely change

• 1950 Siam

  • have high imcome elasticity
  • have export surplus
  • bilateral family system

• Stolper-samuelson thm: rise in the relative eprice of a good lead to rise in return to that factor which used most intensively

• Corn law debate: profit of landlord vs consumers

• factors of growth capital

  • geography, trade
  • institution (rent seeking, corruption, law)
  • natural resource
  • human capital
  • productivity

• comapare the develop history from Japan to other countries
• center-periphery theory: ??
• prince of the front palace??
• corvee?
• tokugawa
• Regent
• samurai level becomes businessman

• homework about questions about the correlation of figures

• growth strategies

  • growth is of political, economic, social transformation
  • rule of 72: growth rate of x percent would double GDP in 72/x years
  • the denmark experience: 2% but steady for 100 years
  • middle income trap

• develop models

  • Alex: state intervention is needed
  • Gershcenlron (Russian): more backwardness needs more intervention
    • apply capital intensive rather than labor intensive
  • Lewis (travelled thailand): dual economy, surplus labor
    • agricultural sector dont maximize profit while industrial sector do
    • Lewis truning point: when a constant low wage rate is no more available, need to go more technology
  • Rosenstein: the big push theory
    • heavy infrastructure is need to get up
    • gov makes crowd in investment
  • Raul Prebisch (latiin american's Keynes)
    • Singer and Prebisch hypothesis: demand elastiticy of income is higher in menufacturing goods than agriculture goods
  • Rostow: 5 stages
    • old, pre-takeoff, takeoff,
  • Akamatsu (flying geese): dynamic(shifting) comparative advantage

• thailand's plan

  1. import institute
  2. ...
  3. sufficient economy

• sources of happiness

  • Richard Layard: once food is guaranteed, happier is not easy
    • trust
    • commuity
    • divorce
    • unemployment
    • religious
    • quality of gov

• why nation fail (Acemoglu)

  • extractive vs inclusive institution

• got pop quiz 1

• taboo book

  • 1984

• homework

  • review question
  • reading: review article of why nation fail
    • Acemoglu and Robinson's view on develpoment:
      1. political and economic development
      2. institution are product of experience and power group's willing
      • exmaple
        • England around Gloorious Revolution 1688
        • North and South America influenced by methods of colonization
        • Russia provides no incentive for communist population so could not long time exist
        • China broden successfully its market economics w/o shake its government; "creative destruction that sustain productivity will not take place"
    • alternative theores that defied by Acemoglu
      1. geography
      • countries in same region could have different result
      2. culture
      • across the boarder made different results (US/mexico, east west germany)
      3. economic ignorance
      • only apply superficial market tools without political side change are shown useless among world bank and IMF examples
    • the point of the reviewer
      • AR approach is hard to go quantative analysis