The impact of inflation on economic growth: evidence from a panel of selected Asia countries

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE IMPACT OF INFLATION ON ECONOMIC GROWTH: EVIDENCE FROM A PANEL OF SELECTED ASIA COUNTRIES A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By VU DOAN THANH TIEN Academic Supervisor: Dr LE CONG TRU HO CHI MINH CITY, AUGUST 2012 i DECLARATION “I certify that the substance of this thesis has not already been submitted for any degree and have not been currently submitted for any other degree I certify that to the best of my knowledge and help received in preparing this thesis and all sources used have been acknowledged in this thesis.” ii ACKNOWLEDGEMENTS The first person I would like to send special thanks to is my supervisor - Dr Le Cong Tru I’m grateful not solely his help throughout the thesis process, but also enthusiasm and many lessons in an attempt to improve my knowledge and skills as well He is usually ready to assist me anytime, although he is bustling The professor often keeps track of my work and motivates me to finish the duty To gain the result today, I cannot miss out his contributions Thanks so much, Dr.Tru! Next, I’m happy to thank to Dr Hoai, Dr Ngai, and Dr Nam They tried their best to help me select an appropriate topic for my thesis When I confront to issues, they supported to find the solution and give advice in hope that I might overcome the problems Besides, I also thank to the other professors of VNP for lectures and precious materials At the same time, I also send thanks to VNP officials, especially Ms Hong They are very nice in helping me when having troubles They inform exactly and quickly to students I enjoy their enthusiasm Additionally, I also send thanks to Mr Quy - a librarian He is nice to his duty I’m always welcomed by him Last but not least, I cannot forget sending thanks to my family and friends I’m very grateful them to take care of and encourage me while performing the thesis Not only they support for finance, but also for mental I always keep in mind devotion and sacrifice of all Thanks so much for everything!!! iii TABLE OF CONTENTS TABLE OF CONTENTS IV LIST OF FIGURES VII LIST OF TABLES VIII ABSTRACT CHAPTER INTRODUCTION 1.1 PROBLEM STATEMENT 1.2 RESEARCH OBJECTIVES AND RESEARCH QUESTIONS 1.3 STRUCTURE OF THE PAPER CHAPTER LITERATURE REVIEW 2.1 THEORIES RELATED TO INFLATION AND GROWTH 2.1.1 Classical Theory 2.1.2 Neo-Classical Theory 2.1.3 Endogenous Theory 10 2.1.4 Keynesian Theory 10 2.1.5 Neo-Keynesian Theory 11 2.1.6 Monetarist Theory 11 2.2 GROWTH MODELS 12 2.2.1 The Basic Growth Model 13 2.2.2 Solow Model 13 2.2.3 Augmented Solow Model 14 2.3 VARIABLE DEFINITION 15 2.3.1 Growth Rate 15 2.3.2 Inflation 16 2.3.3 Cost of Inflation 17 2.3.4 Control Variables 18 2.3.5 Threshold Concept 21 iv 2.4 EMPIRICAL STUDIES 21 2.4.1 The Studies of 1960s-1980s .22 2.4.2 The Studies of 1990s 23 2.4.3 Recent Studies 26 CHAPTER 31 ECONOMIC OUTLOOKS OF STUDIED COUNTRIES 31 3.1 Economic Outlook of Vietnam 32 3.2 Economic Outlook of Philippines 34 3.3 Economic Outlook of Malaysia 36 3.4 Economic Outlook of Indonesia 39 3.5 Economic Outlook of Thailand 42 3.6 Economic Outlook of China 44 3.7 Economic Outlook of India 46 CHAPTER 49 MODEL SPECIFICATION & RESEARCH METHODOLOGY 49 4.1 EMPIRICAL MODEL 49 4.2 MODEL SPECIFICATION 50 4.2.1 Non-Linear Inflation-Growth Relationship .50 4.2.2 Testing Thresholds in the Inflation-Growth Relationship 51 4.3 DATA 52 4.4 RESEARCH METHODS 53 CHAPTER 57 EMPIRICAL RESULTS 57 5.1 DESCRIPTIVE ANALYSIS 57 5.1.1 China 57 5.1.2 India 60 5.1.3 Indonesia 62 5.1.4 Malaysia 64 5.1.5 Philippines 66 5.1.6 Thailand 68 5.1.7 Vietnam 70 5.2 REGRESSION ANALYSIS 72 5.2.1 China 75 v 5.2.2 India 75 5.2.3 Indonesia 76 5.2.4 Malaysia 76 5.2.5 Philippines 77 5.2.6 Thailand 78 5.2.7 Vietnam 78 5.3 INFLATION THRESHOLD ANALYSIS 79 5.3.1 Threshold Results of China 79 5.3.2 Threshold results of India 80 5.3.3 Threshold results of Indonesia 81 5.3.4 Threshold Results of Malaysia 82 5.3.5 Threshold Results of Philippines 84 5.3.6 Threshold Results of Thailand 85 5.3.7 Threshold Results of Vietnam 86 CHAPTER 89 CONCLUSIONS, POLICY RECOMMENDATION, LIMITATIONS AND FUTHER STUDY 89 6.1 CONCLUSIONS 89 6.2 POLICY RECOMMENDATIONS 90 6.3 LIMITATIONS 92 6.4 FURTHER STUDY 92 REFERENCES 93 APPENDIX A 99 APPENDIX B 101 APPENDIX C 107 APPENDIX D 113 vi LIST OF FIGURES Figure 2-1: Analysis framework for the impact of inflation on growth and thresholds remained in the relationship 30 Figure 3-1 A comparison between inflation and growth rate of Vietnam from 1990-2010 33 Figure 3-2: A comparison of inflation-growth relationship of Philippines from 1990 to 2010 35 Figure 3-3 A comparison between inflation and growth rate of Malaysia in the period of years 1990-2010 38 Figure 3-4: A comparison between inflation and economic growth of Indonesia from 1990-2010 41 Figure 3-5: A benchmark between inflation and growth of Thailand in the years of 1990-2010 43 Figure 3-6: A comparison between inflation and growth rate of China from 1990-2010 45 Figure 3-7: A comparison between inflation and economic growth rates of India in the period 1990-2010 47 vii LIST OF TABLES Table 2-1 Summary of the papers with thresholds found in the inflation-growth correlation 27 Table 4-1 Summary variables used in the models 52 Table 5-1 Correlation matrix between variables (China) 58 Table 5-2: Summary Descriptive Statistics (China) 59 Table 5-3: Correlation matrix between variables (India) 60 Table 5-4: Summary Descriptive Statistics (India) 61 Table 5-7: Correlation matrix between variables (Malaysia) 64 Table 5-9: Correlation matrix between variables (Philippines) 66 Table 5-10: Summary Descriptive Statistics (Philippines) 67 Table 5-11: Correlation matrix between variables (Thailand 68 Table 5-13: Correlation matrix between variables (Vietnam) 70 Table 5-15 Regression Results with Fixed Effects Method 73 Table 5-16: Estimation Thresholds of China 80 Table 5-17: Estimation Thresholds of India 81 Table 5-18: Estimation Thresholds of Indonesia 82 Table 5-19: Estimation Thresholds of Malaysia 83 Table 5-20: Estimation Thresholds of Philippines 84 Table 5-21: Estimation Thresholds of Thailand 86 Table 5-22: Estimation Thresholds of Vietnam 87 viii The Impact of Inflation on Economic Growth: Evidence from a Panel of Selected Asia Countries ABSTRACT The objective of this paper is to ascertain whether inflation significantly impacts on economic growth for the selected Asia countries The study relied on macroeconomic theories, the augmented Solow model, and empirical studies for seeking the key variables impacting growth Simultaneously the quadratic model is employed to find out the impacts of inflation on growth, using a panel data of seven Asian countries in the period of 1990-2010 The fixed-effect method was used for capturing the differences among the selected countries The results show that only China, India, Thailand, and Vietnam have a negative effect of inflation on growth, and among the countries, Thailand and Vietnam have statistically significant meaning at 1% and 5% Meanwhile the rest of countries comprising Indonesia, Malaysia and Philippines contain the positive effect of inflation on growth Except for Malaysia, Indonesia and Philippines have statistically significant meaning at 5% For estimating thresholds for the countries, the paper adopted several methods including scatter diagrams, observing average inflation rates and the method of Khan and Senhadji The outputs indicate that only India has the threshold at 7% and statistically significant meaning at 5% The rest of countries including China, Indonesia, Malaysia, Philippines, Thailand and Vietnam also find out the levels of threshold in the relationship between inflation and economic growth are 6%, 12-13%, 4%, 10-13%, 4.2-4.5% and 8%; however, all are not statistically significant meaning Y_CH vs INF_CH^2 16 14 Y_CH 12 10 -5 10 15 20 25 INF_CH Figure B-5: Scatter diagram expressing the correlation between squared- inflation and growth China Y_ID vs INF_ID^2 11 10 Y_ID 2 10 12 14 INF_ID Figure B-6: Scatter diagram expressing the correlation between squared- inflation and growth India 105 Y_IN vs INF_IN^2 12 Y_IN -4 -8 -12 -16 10 20 40 30 50 60 INF_IN Figure B-7: Scatter diagram expressing the correlation between squared- inflation and growth Indonesia 106 APPENDIX C The results of examining Heteroscedasticity by White test approach for each country Table C-1: The result tests Heteroscedastiscity with White test method of Thailand Table White Heteroskedasticity Test: F-statistic Obs*R-squared 12.68475 16.81068 Probability Probability 0.075400 0.266407 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 15:02 Sample: 1990 2008 Included observations: 17 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C INF_TH INF_TH^2 INV_TH INV_TH^2 EMPL_TH EMPL_TH^2 GOV_TH GOV_TH^2 SCH_TH SCH_TH^2 TFP_TH TFP_TH^2 EX_TH EX_TH^2 -1106.962 0.892736 0.015712 2.846262 -0.062387 5103.543 -4838.174 -41.18276 1.670383 -0.607850 0.005334 -0.322935 -0.124924 -0.937344 0.101637 669.3722 0.159763 0.035461 1.470636 0.025422 2801.541 2666.464 19.65958 0.925283 0.445166 0.004879 0.090055 0.034131 0.285909 0.028945 -1.653732 5.587863 0.443074 1.935395 -2.454079 1.821691 -1.814453 -2.094794 1.805268 -1.365446 1.093212 -3.585999 -3.660101 -3.278473 3.511450 0.2400 0.0306 0.7010 0.1926 0.1336 0.2101 0.2113 0.1712 0.2128 0.3054 0.3884 0.0697 0.0672 0.0818 0.0724 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.988863 0.910906 0.451694 0.408055 7.579356 3.572253 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 107 0.756877 1.513287 0.873017 1.608205 12.68475 0.075400 Table C-2: The result tests Heteroscedastiscity with White test method of Philippines White Heteroskedasticity Test: F-statistic Obs*R-squared 0.222935 9.178033 Probability Probability 0.979072 0.819479 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 15:18 Sample: 1990 2008 Included observations: 18 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C INF_PH INF_PH^2 INV_PH INV_PH^2 SCH_PH SCH_PH^2 EMPL_PH EMPL_PH^2 GOV_PH GOV_PH^2 EX_PH EX_PH^2 TFP_PH TFP_PH^2 -759.6039 0.123119 -0.007575 -0.037351 -0.005412 -1.698678 0.010301 4355.317 -5804.171 2.827965 -0.130491 0.226112 0.051447 -0.047382 -0.038647 8385.263 0.626957 0.035201 2.604817 0.060866 13.41877 0.084279 45545.25 59570.86 24.87968 1.098030 1.238332 0.159855 0.720372 0.076908 -0.090588 0.196375 -0.215185 -0.014339 -0.088921 -0.126590 0.122230 0.095626 -0.097433 0.113666 -0.118841 0.182594 0.321832 -0.065774 -0.502507 0.9335 0.8569 0.8434 0.9895 0.9347 0.9073 0.9104 0.9298 0.9285 0.9167 0.9129 0.8668 0.7687 0.9517 0.6499 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.509891 -1.777286 1.086543 3.541728 -10.90908 2.906578 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 108 0.364679 0.651984 2.878787 3.620763 0.222935 0.979072 Table C-3: The result tests Heteroscedastiscity with White test method of Malaysia White Heteroskedasticity Test: F-statistic Obs*R-squared 4.431385 15.74619 Probability Probability 0.357916 0.329119 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 15:31 Sample: 1990 2008 Included observations: 16 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C INF_MA INF_MA^2 INV_MA INV_MA^2 SCH_MA SCH_MA^2 EMPL_MA EMPL_MA^2 GOV_MA GOV_MA^2 EX_MA EX_MA^2 TFP_MA TFP_MA^2 1052.606 -0.018331 -0.004319 0.043061 -0.000107 -0.558965 0.003274 -5727.242 7558.738 8.339727 -0.334643 -0.022832 0.005692 -0.024184 0.009137 394.3614 0.374507 0.044982 0.312770 0.005244 0.522908 0.003498 2214.507 2931.354 5.980264 0.242028 0.077944 0.003645 0.049908 0.009175 2.669141 -0.048947 -0.096017 0.137676 -0.020411 -1.068954 0.935829 -2.586238 2.578583 1.394542 -1.382663 -0.292932 1.561483 -0.484575 0.995879 0.2282 0.9689 0.9391 0.9129 0.9870 0.4788 0.5211 0.2349 0.2355 0.3960 0.3986 0.8186 0.3626 0.7127 0.5013 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.984137 0.762054 0.102968 0.010602 35.85104 2.742301 Mean dependent var 0.162439 S.D dependent var 0.211088 Akaike info criterion -2.606380 Schwarz criterion -1.882078 F-statistic 4.431385 Prob(F-statistic) 0.357916 Table C-4: The result tests Heteroscedastiscity with White test method of Indonesia White Heteroskedasticity Test: F-statistic Obs*R-squared 2.324731 16.01581 Probability Probability Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 15:52 109 0.341281 0.312410 Sample: 1990 2008 Included observations: 17 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C INF_IN INF_IN^2 INV_IN INV_IN^2 GOV_IN GOV_IN^2 EMPL_IN EMPL_IN^2 SCH_IN SCH_IN^2 EX_IN EX_IN^2 TFP_IN TFP_IN^2 254.2346 -1.962018 0.108018 1.460292 -0.023692 12.30396 -0.843977 -1544.441 1847.124 0.395172 -0.003534 0.353916 -0.046557 -0.384118 0.091922 1000.408 1.514197 0.083816 1.791008 0.030192 10.09952 0.701936 4878.242 5662.429 0.555308 0.004653 0.625711 0.067871 0.626329 0.245173 0.254131 -1.295748 1.288757 0.815346 -0.784725 1.218272 -1.202357 -0.316598 0.326207 0.711627 -0.759452 0.565622 -0.685959 -0.613285 0.374928 0.8231 0.3244 0.3264 0.5005 0.5148 0.3473 0.3523 0.7815 0.7752 0.5505 0.5269 0.6286 0.5636 0.6021 0.7437 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.942107 0.536852 0.342597 0.234745 12.27902 3.042164 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.395400 0.503412 0.320115 1.055304 2.324731 0.341281 Table C-5: The result tests Heteroscedastiscity with White test method of India White Heteroskedasticity Test: Obs*R-squared 15.00000 Probability 0.378155 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 16:06 Sample: 1993 2008 Included observations: 15 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C INF_ID INF_ID^2 INV_ID INV_ID^2 EMPL_ID EMPL_ID^2 SCH_ID SCH_ID^2 GOV_ID -35390.59 80.49248 -5.058527 -0.867744 0.125830 241064.2 -313342.5 -412.0828 4.466731 -296.4661 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA 110 GOV_ID^2 EX_ID EX_ID^2 TFP_ID TFP_ID^2 R-squared S.D dependent var Sum squared resid Log likelihood 12.61879 -1.728005 -20.04616 -7.671974 0.224411 1.000000 2.112694 1.22E-10 170.2143 NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA Mean dependent var 0.885253 Akaike info criterion -20.69524 Schwarz criterion -19.98719 Durbin-Watson stat 3.004914 Table C-6: The result tests Heteroscedastiscity with White test method of China White Heteroskedasticity Test: F-statistic Obs*R-squared 844.3850 15.99865 Probability Probability 0.026967 0.313457 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 02/01/12 Time: 10:56 Sample: 1990 2008 Included observations: 16 Excluded observations: Variable Coefficient Std Error t-Statistic Prob C EMPL_CH EMPL_CH^2 EX_CH EX_CH^2 GOV_CH GOV_CH^2 INF_CH INF_CH^2 INV_CH INV_CH^2 SCH_CH SCH_CH^2 TFP_CH TFP_CH^2 4437.751 -15626.87 13859.89 -0.890554 0.042557 2.683083 -0.122188 -0.028970 0.003763 -0.629147 0.000168 -0.732171 0.006251 0.172993 -0.033970 620.1885 2199.069 1954.478 0.065356 0.002607 1.182910 0.040287 0.021476 0.000836 0.435729 0.005164 0.115868 0.001104 0.010228 0.000741 7.155487 -7.106129 7.091353 -13.62617 16.32424 2.268205 -3.032961 -1.348964 4.499607 -1.443894 0.032524 -6.318981 5.659400 16.91393 -45.85239 0.0884 0.0890 0.0892 0.0466 0.0389 0.2644 0.2028 0.4061 0.1392 0.3856 0.9793 0.0999 0.1113 0.0376 0.0139 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood 0.999915 0.998731 0.025408 0.000646 58.24059 Mean dependent var 0.418451 S.D dependent var 0.713316 Akaike info criterion -5.405073 Schwarz criterion -4.680771 F-statistic 844.3850 111 Durbin-Watson stat 3.897552 Prob(F-statistic) 0.026967 Probability Probability 0.704401 0.474680 White Heteroskedasticity Test: F-statistic Obs*R-squared 0.732514 13.66861 Test Equation: Dependent Variable: RESID^2 Method: Least Squares Date: 06/27/12 Time: 10:37 aSample: 1990 2008 Included observations: 19 Variable Coefficient Std Error t-Statistic Prob C INF_VN INF_VN^2 INV_VN INV_VN^2 EMPL_VN EMPL_VN^2 GOV_VN GOV_VN^2 SCH_VN SCH_VN^2 EX_VN EX_VN^2 TFP_VN TFP_VN^2 77.89618 -0.048242 0.000236 -0.028595 0.000280 -119.2453 105.5372 -12.06031 0.815532 -0.023581 0.000727 -0.145208 -0.010101 -0.074753 0.065998 142.0278 0.104019 0.000972 0.284121 0.005926 514.2844 513.9383 10.18756 0.667283 0.035943 0.001710 0.410892 0.016520 0.118228 0.040079 0.548457 -0.463778 0.242565 -0.100644 0.047236 -0.231866 0.205350 -1.183828 1.222168 -0.656052 0.425556 -0.353397 -0.611429 -0.632276 1.646699 0.6126 0.6669 0.8203 0.9247 0.9646 0.8280 0.8473 0.3020 0.2887 0.5476 0.6923 0.7416 0.5740 0.5615 0.1750 R-squared Adjusted R-squared S.E of regression Sum squared resid Log likelihood Durbin-Watson stat 0.719401 -0.262697 0.438623 0.769560 3.500728 2.977541 Mean dependent var S.D dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic) 0.318940 0.390339 1.210450 1.956059 0.732514 0.704401 Table C-7: The result tests Heteroscedastiscity with White test method of Vietnam 112 APPENDIX D The scatter diagrams present the relationship between variables in the model of the countries 584 10 16.5 580 16.0 15.5 572 568 GOV_CH EX_CH EMPL_CH 576 564 556 13.5 -2 10 12 14 16 14.5 14.0 560 15.0 13.0 Y_CH 10 12 14 16 Y_CH 25 20 10 12 14 16 12 14 16 Y_CH 44 80 42 70 40 60 10 SCH_CH INV_CH INF_CH 15 38 50 36 -5 40 34 10 12 14 16 30 Y_CH 10 Y_CH 12 14 16 10 Y_CH 10 TFP_CH -5 -10 10 12 14 16 Y_CH Figure D-1: The scatter diagrams describe the correlation between the variables in the model of China 113 40 60 36 56 32 INV_ID 64 SCH_ID TFP_ID 52 48 -2 24 44 10 11 20 Y_ID 10 11 Y_ID 14 12 10 10 11 10 11 Y_ID 13.6 13.2 12.8 -1 EX_ID 12.4 GOV_ID INF_ID 28 12.0 -4 -5 10.8 10.4 10 11 -3 11.6 11.2 -2 -6 Y_ID Y_ID 10 11 Y_ID 43 42 EMPL_ID 41 40 39 38 37 36 10 11 Y_ID Figure D-2: The scatter diagrams describe the correlation between the variables in the model of India 114 80 40 76 36 72 -4 -8 32 INV_IN 68 SCH_IN TFP_IN 64 60 56 -12 28 24 52 20 -16 -20 -16 48 -12 -8 -4 44 -16 12 -12 -8 -4 Y_IN 16 -16 12 50 40 -4 12 12 Y_IN 9.0 12 8.5 10 8.0 30 20 EX_IN 7.5 GOV_IN INF_IN -8 Y_IN 60 7.0 -8 -4 12 5.5 -12 6.5 6.0 10 -16 -12 5.0 -16 -12 -8 -4 Y_IN Y_IN 12 -2 -16 -12 -8 -4 Y_IN 45 EMPL_IN 44 43 42 41 -16 -12 -8 -4 12 Y_IN Figure D-3: The scatter diagrams describe the correlation between the variables in the model of Indonesia 115 75 45 40 70 -8 INV_MA 35 SCH_MA TFP_MA -4 65 25 -12 60 20 -16 -20 55 -8 -4 12 15 -8 -4 Y_MA 12 -8 -4 Y_MA 12 12 Y_MA 14 25 20 13 15 12 EX_MA GOV_MA INF_MA 30 11 10 10 0 -8 -4 12 -5 -8 -4 Y_MA Y_MA 12 -8 -4 Y_MA 400 395 EMPL_MA 390 385 380 375 370 365 -8 -4 12 Y_MA Figure D-4: The scatter diagrams describe the correlation between the variables in the model of Malaysia 116 84 26 82 24 80 -2 22 78 INV_PH SCH_PH TFP_PH 76 18 74 -4 16 72 -6 70 -1 20 14 -1 Y_PH -1 Y_PH 20 14 16 13 12 12 8 Y_PH -2 EX_PH GOV_PH INF_PH 11 10 -4 -6 -8 -10 -1 -12 -1 Y_PH Y_PH -1 Y_PH 395 390 EMPL_PH 385 380 375 370 365 360 -1 Y_PH Figure D-5: The scatter diagrams describe the correlation between the variables in the model of Philippines 117 80 44 70 40 60 36 -5 INV_TH SCH_TH TFP_TH 50 32 40 28 30 24 -10 -15 -12 -8 -4 20 -12 12 -8 -4 Y_TH 12.5 20 12.0 15 EX_TH GOV_TH 10.5 12 9.0 -12 12 12 -5 9.5 -4 -4 10 11.0 10.0 -5 -8 -8 Y_TH 11.5 -10 -12 20 -12 12 Y_TH 10 INF_TH -8 -4 Y_TH Y_TH 12 -10 -12 -8 -4 Y_TH 55 54 EMPL_TH 53 52 51 50 49 48 -12 -8 -4 12 Y_TH Figure D-6: The scatter diagrams describe the correlation between the variables in the model of Thailand 118 30 44 40 20 36 10 -1 32 INV_VN SCH_VN TFP_VN -10 24 20 -2 -20 16 -3 -4 -30 12 Y_VN Y_VN 80 8 Y_VN 8.5 70 -2 -4 8.0 60 -6 7.5 40 30 -8 EX_VN GOV_VN 50 INF_VN 28 7.0 -10 -12 6.5 20 -14 6.0 10 -16 5.5 -18 Y_VN Y_VN Y_VN 58 56 EMPL_VN 54 52 50 48 46 44 Y_VN Figure D-7: The scatter diagrams describe the correlation between the variables in the model of Vietnam 119