Myths about miracles: the case of Thailand

Over several decades, Thailand achieved rapid economic growth, based on booming exports, combined with low inflation, a record ending only with the crisis of 1997. The sources of this achievement have been poorly understood. The rapid growth has often been attributed to industry policies that promoted exports. But policy measures ostensibly designed to promote exports made no such contribution; they did not favour industries that subsequently performed well. The macroeconomic stability has likewise been attributed in part to discretionary fiscal stabilization. However, short-run, discretionary fiscal policy made almost no contribution to macroeconomic stabilization; automatic fiscal stabilizers were far more important.