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Aggregate Demand, Aggregate Supply and Economic Growth of Vietnam: Theory and evidence on an econometric analysis

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Abstract

This paper examines the determinants of economic growth of Vietnam focusing on an aggregate demand and aggregate supply with an econometric analysis. According to the regression and scenario simulation analysis, we can see that although the Vietnamese economy has achieved steady growth since Doi Moi, the supply-side is still too weak to meet the demand-side increases, which results in the macro imbalances including trade deficit and inflation as experienced in 2007-08. FDI inflows have played a significant role to strengthen the supply-side economy so that the Vietnamese government needs to improve her environments to attract foreign capital inflows for sustainable growth.

Suggested Citation

  • Osamu Nakamura, 2011. "Aggregate Demand, Aggregate Supply and Economic Growth of Vietnam: Theory and evidence on an econometric analysis," Working Papers EMS_2011_08, Research Institute, International University of Japan.
    • Handle: RePEc:iuj:wpaper:ems_2011_08
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    File URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2011_08.pdf
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    4. Krugman, Paul, 1989. "Differences in income elasticities and trends in real exchange rates," European Economic Review, Elsevier, vol. 33(5), pages 1031-1046, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    aggregate demand; aggregate supply; macro econometric model; FDI; scenario simulation;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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