The Relationship Between Domestic Debt, Household Consumption and COVID-19 Impact: The Case of Thailand
Keywords:
Public debt, Household consumption, COVID-19, ThailandAbstract
This study explores the relationship between public debt and household consumption in Thailand during the period between 2005 and 2024, with an added focus on the impact of the COVID-19 pandemic on the relevant factors. The research employs Autoregressive Distributed Lag (ARDL) and Segmented Regression. The study demonstrates that public debt positively and significantly affects household spending, with the impact taking place within two to four quarters after policy implementation. The segmented regression analysis shows that the relationship between public spending and individual consumption weakened in the period post-COVID, revealing that the effectiveness of public debt as a stimulus to consumption was reduced after the event, implying that debt may be approaching critical levels that could affect economic stability. These findings emphasize the need for appropriate fiscal policy to balance short-term economic stimulus and long-term fiscal stability.
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