Small open economies traditionally do not consider exchange rates explicitly when targeting inflation. However, the models used rely on various assumptions. To investigate this, we developed a small-scale, structural general equilibrium model for the Thai economy. Using Bayesian estimation, we...

This paper examines the relationship between inflation expectations and monetary policy in Thailand. The forward-looking Taylor-rule equations are applied to measure the monetary policy action. Inflation expectations extracted from the yield curves are used. Overall, there are two main findings...