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The relationship between domestic saving and economics growth and convergence hypothesis: Case study of Thailand
Södertörn University College, School of Social Sciences.
2011 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesisAlternative title
Abstract [en]

We cannot go against the fact that saving is one of the main factors to economic growth. Accumulated saving can help to be the sources of capital stock to create investment, production, and employment. And all these activities enhance economic growth.

Therefore the main objective of this paper, “The relationship between Domestic Saving and economic growth and convergence hypothesis: case study of Thailand”, was to investigate the causality relationship between the domestic saving and economic growth of Thailand whether the direct of causality go from domestic saving to economic growth, or vice versa. Using time series annual data from 1960 to 2010, Granger causality test were conducted. The empirical result suggests that the direct of causality go from economic growth to domestic saving only.

As Thailand has aimed to attaining a high income or economic growth, this paper also examine whether the convergence hypothesis does hold in Thailand. This part would check whether or not Thailand is in the process of convergence, catching up, lagging behind, loose catching up, loose lagging behind or divergence over time compared to developed countries. This test select pairwise between Thailand-Singapore, Thailand-United States, Thailand-United Kingdom, deployed data from 1970 to 2010, and the Augmented Dickey–Fuller (ADF) Test. The results demonstrate that convergence hypothesis does not hold in Thailand.

Finally,from the result of Granger Causality report that economic growth rate does matter lead to growth rate of domestic savings in Thailand only. Thus, toprove whether gross domestic saving per capita growth rate can help narrow the different of GDP between two countries concerned, this paper examine the correlation of two variables,deployed the OSL methods to investigate correlation betweengross domestic saving growthrate and the different of GDP per capita between Thailand and Singapore.This test also can help examinewhethersavingdoes help support convergence hypothesis for Thailandor not. The result shows thatdomestic saving growthrate does not help narrow the range of different of income of Thailand and Singapore which meanthat domestic saving growthrate does not support convergence hypothesis in Thailand.

Place, publisher, year, edition, pages
2011. , 79 p.
Keyword [en]
Thailand gross saving, Economics growth, Convergence hypothesis
National Category
URN: urn:nbn:se:sh:diva-9387OAI: diva2:425833
Subject / course
2011-06-08, 09:45 (English)
Social and Behavioural Science, Law
Available from: 2011-06-22 Created: 2011-06-22 Last updated: 2011-06-22Bibliographically approved

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