Applied Economics Journal <p>Applied Economics Journal (ISSN: 2586-9124) is a double blind peer-reviewed journal devoted to the applications of economic theories, concepts and methodologies to analyze well-defined research issues. It encourages empirical analysis, simulation, prediction and forecasting research. While it is aimed at academics and policy makers interested in the Thai and Asian economies, the journal also considers articles that deal with global issues. The primary criteria for selecting papers are originality, quality, and contribution to the field. The categories of articles include commentary, review articles, research articles and book reviews. &nbsp;AEJ is indexed in the Thai-Journal Citation Index Centre (TCI), IDEAS/RePEc, CAB Abstracts, Google Scholar, ASEAN Citation Index (ACI) and Emerging Sources Citation Index (ESCI). Two issues are published a year, in June and December. All articles are open access. No submission fee and page charge.</p> en-US <p style="text-align: justify;">Submission of a manuscript to Applied Economics Journal will be taken to imply that the author(s) guarantee that the paper is an original work, has not been published, and is not being considered for publication elsewhere either in printed or electronic form. The author(s) have obtained permission from the copyright holder to reproduce in the article material not owned by them, that author(s) have acknowledged the source, and that this article contains no violation of any existing copyright or other third party right or any material of an obscene, indecent, libelous or otherwise unlawful nature and that the article does not infringe the rights of others. The author(s) will indemnify and keep indemnified the editors and Applied Economics Journal, Center for Applied Economics Research (CAER), Faculty of Economics, Kasetsart University against all claims and expenses. The author(s) agree that the publisher may arrange for the article to be published and sold or distributed on its own, or with other related materials, and could reproduce and/or distribute in printed, electronic or any other medium whether now known or hereafter devised, in all languages, and to authorize third parties to do the same.</p> (Waleerat Suphannachart) (Waleerat Suphannachart) Mon, 23 Dec 2019 00:00:00 +0700 OJS 60 Editorial Rewat Thamma-Apiroam Copyright (c) Mon, 23 Dec 2019 00:00:00 +0700 Contents Copyright (c) Mon, 23 Dec 2019 00:00:00 +0700 The Impact of Demographics on Inflation in Thailand <p>Recently, Thailand has simultaneously experienced low inflation rate and aging population. Is there a linkage between these two variables as questioned by policy makers and researchers in many countries?&nbsp; The lower working age population and a higher aged people ratio could theoretically change economic agent’s behaviors such as consumption, saving, and others affecting to the macro-level economy and inflation pressures. This paper, hence, tries to find the impact of demographic change on inflation in Thailand from an empirical view. Based on the overall CPI basket and its subcomponents over the sample period 2001 to 2016, the results show that, in general, a declining Thai working age population has a significant deflationary impact. In contrast, in the case of housing and furnishing inflation, the results suggest an inflationary pressure. The findings support the view that demographics are one of the structural factors that alter the economic contexts and have implications on macroeconomic policies in Thailand.&nbsp;</p> Kumpon Pohnpattanapaisankul Copyright (c) 2019 Mon, 23 Dec 2019 00:00:00 +0700 Government Size and Economic Growth: A Panel Data Study Comparing OECD and Non-OECD Countries <p>This study examines the non-linear relationship between government size and economic growth following Armey (1995). Generalized Method of Moments (GMM) estimation technique is applied to panel data consisting of 89 countries from 1990 to 2018. The results show substantial evidence for Armey curve across non-OECD countries. The findings suggest that a rise in government size initially enhances economic growth but later government size reduces economic growth once the government size crosses a certain threshold. However, the findings relating to the OECD countries do not support the presence of Armey curve.&nbsp;&nbsp;</p> Sheraz Rajput, Aziz Tariq Copyright (c) 2020 Applied Economics Journal Mon, 23 Dec 2019 00:00:00 +0700 Hedging Effectiveness on the Thailand Futures Exchange Market <p>This study examines hedge strategies through derivative instruments in an emerging market, with evidence from Thailand during the period 2011 to 2018. Focusing on a series of futures contracts on the Thailand Futures Exchange market (TFEX), namely SET50 futures, gold futures and interest rate futures, the study methods employed in both static and time-varying models: OLS, VECM, time-varying OLS, EGARCH, BEKK and DCC. In general, the results show that SET50 futures display the best hedge ratio and hedge effectiveness in Thailand, followed by gold futures and interest rate futures. Therefore, investors in Thailand will benefit from investing in SET50 futures only if their business or hedge assets relate to the composite index, particularly the SET50 index. Otherwise, the other types of derivatives or financial instruments may need to be considered more carefully for investment strategies. However, the hedge effectiveness of gold futures appears to be sensitive when the time-varying models are applied differently. Furthermore, these results are consistent with the previous literature and shed more light on the study of derivative products in Thailand.</p> Polwat Lerskullawat Copyright (c) 2019 Mon, 23 Dec 2019 00:00:00 +0700 Sectoral Business Cycle Asymmetries and Regime Shifts: Evidence from Turkey <p>The aim of this paper is to fit Markov regime switching behavior models to the sectoral GDP growth rates in Turkey for the period 1998: Q1 to 2019: Q2. The findings support the existence of two regimes as low-growth and high-growth for all three sectors. The mean growth rate of the total GDP is closer to the mean growth rate of the industry sector than to the mean growth rate of the agricultural and services sectors. Moreover, the regime volatilities are higher in the low-growth regime for the industry and services sectors and vice versa for the agricultural sector and the total GDP. The results also show that the high-growth regime periods are longer than the low-growth regime periods. Finally, it is observed that there are more frequent fluctuations in the agricultural sector than the other sectors’ cycles based on the smoothed probabilities for low-growth regime. Moreover, since 2016 till now, the services sector’s regime switching behavior is associated with the low-growth regimes of GDP, which indicates that <em>Turkey's</em> &nbsp;largely free-market economy is driven by the <em>services sector.</em> The findings also show that Markov <em>switching model used in this study provides an advantage</em> to model the nonlinearities in GDP fluctuations which assume different behaviors in different regime periods.</p> Dicle Ozdemir Copyright (c) 2019 Applied Economics Journal Mon, 23 Dec 2019 00:00:00 +0700