The effect of change in output and inflation on nominal interest rate during the global financial crisis in the Eurozone, the United States, and Thailand and their differences

Abstract

This study focuses on the consequences of the global financial crisis as changes in output and inflation. By researching the effects of these changes, which are the main factors influencing monetary policy, on nominal interest rate, it is important to find out which of these two factors are more important when it comes to the Eurozone and to compare it with the Unites States’ and Thailand’s monetary policy. The paper will focus on comparing the effects of these two variables on nominal interest rate before the crisis and during the global financial crisis. Subsequently, the important part in the paper is the impact of the global financial crisis on changes in the intra-regional and extra-regional trade and FDI flow in ASEAN. According to the results, I will try to prove that the effect of the global financial crisis on Thailand’s monetary policy and the economy of the ASEAN countries is much different and lower compared to the Eurozone and the U.S.