Since July 1997, Thailand has suffered from a triple crises of financial instability, currency crisis and domestic depression. To explain this economic crisis, many scholars focussed on international capital movement and the bubble economy, and pointed out a policy mismatch between financial liberalization and foreign currency policy or the policy of pegging to the U.S. dollar. However, these arguments seem to neglect other important factors causing the economic crisis. These are structural changes occurring during the economic boom, liberalization of investment in major industries, and organizational problems facing the Central Bank. This paper aims to clarify these aspects with reference to the movement of real economy in Thailand.
