The Soundness of Macroeconomic Fundamentals in Vietnam

Ly Dai Hung (1)

1 Vietnam Institute of Economics, Hanoi, Vietnam

The paper investitages the soundness of macroeconomic fundamentals in Vietnam, by time varying vector autoregression (TVC-BSVAR) method over a quarterly sample over 03/2000-12/2020. The evidence records three macroeconomic princinples: the trade-off between output and inflation, VND depreciation rate enhancing output growth rate, and lower inflation improving economic growth. This structure determines the resilience of economy toward world shocks. Specially, the disturbed FDI capital can substitute the world GDP growth rate on raising domestic GDP growth rate, inflation rate and evaluating domestic currency. The result also suggests that the improvement of FDI absorption capacity, through the institutional quality, needs to be a prioritied policy for the economy to self-insure against the negative schocks from world growth rate and oil price.

Mots clés: Macroeconomic Fundamentals; Vector Autoregression; Foreign Capital Inflows

Domaines: Economies et finances

Ly Dai Hung. The Soundness of Macroeconomic Fundamentals in Vietnam. 2020. ⟨hal-03195651⟩