Abstract: “The Thai baht had been volatile since the implementation of the managed floating system in July 1997. At the same period, expenditures of foreign tourists in Thailand had been the major sector that contributed a significant growth on Thai GDP and generated domestic final demand and final outputs. This paper aims to explore the impact of Thai baht on expenditures of foreign tourists in Thailand, sectoral final demand and sectoral output by using two-step approach cointegration, bridge matrix and input-output table. In the first section, the behavioral equation of expenditures of foreign tourists was estimated based on the annual data during 1997-2012. The results indicated that world GDP per capita, exchange rate and development of tourism sector significantly determined expenditures of foreign tourists . In contrast, domestic economic growth and political stability cannot explained the level of expenditures of foreign tourists with statistical significance. For every one baht depreciat”

Keywords: Exchange rate, Tourism in Thailand, MacroIO Model