Economic Policy and Transition Economies

Chapter 1. This section is examined statistically whether the importance of the motives for act and the acceptances for lower wage and labor incentives is different between each age group. Above results shows young age group is “self-actualization” as important motive, old age group is “moral” as it. And old age group has higher labor incentives when it is suggested higher wage than the wage according to my ability, and when it is the lifetime employment system. Older age group think “moral” as important motive. They think that want to rewarded with the lifetime employment system and higher wage. It checked that action motives differed according to a generation. Moreover, Prospect Theory, the efficiency wage hypothesis, and the relative wage hypothesis were satisfied, and it was checked that the influences differ in his twenties as compared with other generations. Moreover, the rate of desiring lifelong employment system as a senior was large, and his twenties had many people who do not desire lifelong employment system strongly. This shows that consciousness change and a behavioral change may have arisen in that time in 1990 which shifted to the market economy bordering on people who were his teens, i.e., his present twenties, and his 30’s. It is shown that there is no big difference the results of transition country, the results of advanced nations, especially the result of Japan.

Chapter 2. In this section, the money illusion not only has arisen, but it was checked that a time preference rate is not constant. If it is consumed as the younger age group and a rate of time preference changes with generations, it will be thought that 1-dollar value changes with generations. That is, even if the loss of the same amount produces the younger age group and an old age layer, if it is the younger age group, a loss may also feel the loss by a money illusion small. That is, the time preference rate which affects consumption smoothing also affects a money illusion. The difference for every generation of a time preference rate becomes larger than the influence which only consumption smoothing has on people’s economical action. It has a possibility of bringing a big difference to the economical action for every generation. If the preference of a between at the different time changes with generations, the consumer behaviors at a certain time not only differ for every generation, but it will be thought that the reactions to a loss also differ.

Chapter 3. This section investigates whether the monetary policy framework has changed since the introduction of inflation targeting in Thailand. We analyze the changes in the model of monetary policy and estimate its effects by estimating the demand function for money. We obtain four results from our analysis. First, changes in the monetary policy framework did not change the model of the money demand function. Second, the adoption of inflation targeting policy leads to structural changes. Third, the effects of monetary policy changed with the adoption of inflation targeting policy. Interest rate elasticity is positive before the framework change but negative after the policy change. However, its value is weak. Fourth, the interest rate elasticities of M2 and r are stable and predictable. This is important because the domestic interest rate, not the exchange rate or the foreign interest rate, controls monetary policy. It can also be applied with the same money demand function as in advanced economies.