Does A Long-Run Relationship Exist between Agriculture and Economic Growth in Thailand?

Chalermpon Jatuporn, Li-Hsien Chien, Patana Sukprasert, Supaporn Thaipakdee

Abstract


This empirical study investigates the causality between agriculture and economic growth in Thailand over the period of 1961 to 2009. A Granger causality approach and the Wald (?2) coefficient statistic are utilized to reveal a long-run causal relationship and impact transmission between the variables. Based on the time series analyses, a long-run relationship and size impact are detected running from agriculture to economic growth, and vice versa. These findings including with the generalized variance decomposition show that agriculture is existed in a long-term stable in economic growth while economic development encourages the growth of agriculture as a whole. As a conclusion, policy-makers should regard agriculture as an important supporter of Thai economy.


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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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