The Projection of Thai Manufacturing Export in the Bayesian VAR Model

Abstract

This research aims to study the effects of manufacturing value-added, consumer price index, and exchange rate on manufacturing exports in the context of Thailand by utilizing the Bayesian Vector Autoregression (BVAR) model with the annual modified data from 1960 to 2019. This model shows the interactions between these four variables and the forecast result. It was revealed that the effect of the exchange rate can pass through the consumer price index, which further affects manufacturing exports. According to the research results, government authorities should pay attention to domestic price control by controlling the general price level by indirectly controlling the exchange rate, which passes through its effect on domestic prices, and directly controlling domestic prices via monetary and fiscal policy. In addition, manufacturers should pay attention to the reduction of the production cost by investing in modern technology and reducing the per unit cost, which leads to a price reduction.