The credit crisis around the globe: Why did some banks perform better? Journal of Financial Economics, Vol. 105(1), 1-17. Benartzi, S. & Thaler, R. (2001). Naïve Diversification Strategies in Defined Contribution Saving Plans. American Economic Review, Vol 98(1), 79-98. Benigno, G., Chen, H., Otrok, C., Rebucci, A., & Young, E. R. (2013). Financial crises and macro-prudential policies. Journal of International Economics, 89(2), 453-470. Benetton, M., Eckley, P., Garbarino, N., Kirwin, L., & Latsi, G. (2017). Specialisation in mortgage risk under Basel II. Bank of England Staff Working Paper No. 639. Berger, A. N., & Bouwman, C. H. (2013). How does capital affect bank performance during financial crises? Journal of Financial Economics, 109(1), 146-176. Berger, A., Herring, R. and Szegö, G. (1995). The role of capital in financial institutions. Journal of Banking and Finance, Vol 19(3-4), 393-430. Bernanke, B. S., & Mishkin, F. S. (1997). Inflation Targeting: A New Framework for Monetary Policy? The Journal of Economic Perspectives, 11(2), 97-116. Bianchi, J., & Mendoza, E. G. (2010). Overborrowing, financial crises and 'macro-prudential' taxes. National Bureau of Economic Research Working Paper No. w16091. Bicu, A., Chen, L., & Elliott, D. (forthcoming). The leverage ratio and liquidity in the gilt and repo markets. Bank of England Staff Working Paper. Bikhchandani, S., & Sharma, S. (2001). Herd Behavior in Financial Markets. IMF Staff Papers, 47(3). Billings, M. and Capie, F. (2007). Capital in British banking. 1920-1970, Business History, Vol 49(2), 139-162. Boar, C., Gambacorta, L., Lombardo, G., and Pereira da Silva, L. (2017). Finance and macroeconomic performance.

Meanwhile, labor productivity has been dwarfed by the lack of capital and lagged behind the regional standard. On the overall picture of employment, Thailand has had very low unemployment but room to increase productivity remains in the area of reducing underemployment. Let me discuss an example of the agricultural sector. This sector has seen a steady decline of its share in GDP from 1980 to 2007. In contrast, its share in the country’s employment remained high, though reducing from 65 to just about 40 percent of total labor force during the same period. Meanwhile, yield of major crops per unit area is significantly lower than yields in other agriculture exporting countries. In fact, Foreign Agricultural Service of USDA, estimated that Thailand produces rice yield about 430 kilos per rai compared with the world average rice yield of 653 kilos per rai. There is thus ample room to increase productivity in this sector through better land and water management as well as a more systematic farming. Going forward, the problem of labor scarcity, though not unique to Thailand, will also become more of our concern as we are moving into aging society, while population growth remains low. Increasing productivity is therefore the solution to sustain potential growth as well as competitiveness. And, to do so, it is crucial that we increase investment, such that there is sufficient capital formation to facilitate productivity growth. On this note, I am pleased to say that collective effort to increase the level of investment has already taken place.