Learning by exporting and structural change: A Ramsey growth model of Thailand

Modern growth analysis emphasizes technology adoption and human capital as sources of growth and identifies high growth as temporary episodes. The long high growth experience of Thailand is a different story since the growth is not directly associated with advanced technology or high skill intensity. Our understanding is that Thailand's growth has been based on learning by exporting and labor-intensive manufacturing with expanding domestic backward linkages. The analysis using a Ramsey model shows how prolonged growth in Thailand can be explained by this learning mechanism and structural shift from agriculture to exportables. The relationship between exports and productivity is studied in a counterfactual experiment where protection serves as a barrier to exports learning and thereby reduces growth. Openness and structural change come out as the key ingredients of the growth strategy.