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Modelling Transition And International Opening In Asia: The Case Of Vietnam With A Comparison With China And The “Asian Tigers”

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Author Info

  • Alain Sand-Zantman

    (Erudite-Universit� Paris XII et Centre d'Etudes du D�veloppement, TEAM-CNRS/Universit� Paris I)

  • Jean Louis Brillet

    (INSEE (D�partement de la Coop�ration))

  • Cuong Le Van

    (CERSEM-CNRS/Universit� Paris I)

  • Jacques Mazier

    (CEDI, Universit� Paris 13)

Abstract

This paper describes the multisectoral macroeconomic model of a small developing economy in transition, in order to highlight linkages between agriculture and the rest of the economy, and consequences of external opening up. Agriculture is a supply sector, sticky in the short range with market clearing by price adjustment. The non agricultural sector is demand-led, with imperfect competition (and hence sticky prices and indexed nominal wages). According to this dual theoretical pattern, labor market is segmented with an unlimited supply in the rural area. This part of the labor force is employed in the agricultural sector and in the rural non agricultural one. Urban workers are employed in the non agricultural sector but may face unemployment. The wage gap between urban and rural areas induces migration, according to a Harris-Todaro mechanism.This model is applied to the Vietnam case. A calibrated quantitative model performs a base line simulation from 1993 to 2010, following approximately the path planned by the Vietnamese government. Finally, this model is used to sketch various scenarios, such as traditional macroeconomic packages, structural reforms, and external shocks. Comparative Economic Studies (2000) 42, 93–130. doi:10.1057/ces.2000.25

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Comparative Economic Studies.

Volume (Year): 42 (2000)
Issue (Month): 4 (December)
Pages: 93-130

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Handle: RePEc:pal:compes:v:42:y:2000:i:4:p:93-130

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  1. Torsten Sløk & Sanja Kalra, 1999. "Inflation and Growth in Transition: Are the Asian Economies Different?," IMF Working Papers 99/118, International Monetary Fund.
  2. Nicholas Crafts, 1999. "East Asian Growth Before and After the Crisis," IMF Staff Papers, Palgrave Macmillan, vol. 46(2), pages 2.
  3. Rattso, Jorn, 1989. "Macrodynamic adjustment mechanisms in a dual semi-industrialized economy," Journal of Development Economics, Elsevier, vol. 30(1), pages 47-69, January.
  4. Cardoso, Eliana A., 1981. "Food supply and inflation," Journal of Development Economics, Elsevier, vol. 8(3), pages 269-284, June.
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