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Modelling Transition and International Opening in Asia: The Case of Vietnam With a Comparison With China and the "Asian Tigers"

Author

Listed:
  • Alain Sand-Zantman

    (CED, TEAM - Université Paris 1, ERUDITE - Université Paris XII)

  • Jean-Louis Brillet

    (INSEE)

  • Cuong Le Van

    (CERMSEM - Université Paris 1, CNRS)

  • Jacques Mazier

    (CEDI, Université 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 clearning 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 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 framework is applied to the Vietnam case. A calibrated quantitative model performs a base line simulation from 1993 to 2010, following approximately the path designed by the Vietnamese government. Finally, this model is used to sketch various scenarios, among which traditional macroeconomic packages, structural reforms, and external shocks

Suggested Citation

  • Alain Sand-Zantman & Jean-Louis Brillet & Cuong Le Van & Jacques Mazier, 2000. "Modelling Transition and International Opening in Asia: The Case of Vietnam With a Comparison With China and the "Asian Tigers"," Cahiers de la Maison des Sciences Economiques bla00031, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:mse:wpsorb:bla00031
    DOI: 10.1057/ces.2000.25
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    References listed on IDEAS

    as
    1. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
    2. Krugman, Paul & Taylor, Lance, 1978. "Contractionary effects of devaluation," Journal of International Economics, Elsevier, vol. 8(3), pages 445-456, August.
    3. Nicholas Crafts, 1999. "East Asian Growth Before and After the Crisis," IMF Staff Papers, Palgrave Macmillan, vol. 46(2), pages 1-2.
    4. Cardoso, Eliana A., 1981. "Food supply and inflation," Journal of Development Economics, Elsevier, vol. 8(3), pages 269-284, June.
    5. Mr. Torsten M Sloek & Mr. Sanja Kalra, 1999. "Inflation and Growth in Transition: Are the Asian Economies Different?," IMF Working Papers 1999/118, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Vietnam; multisectoral models; development; transition;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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