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

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.