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Economic growth and balance-of-payments constraint in Vietnam

Author

Listed:
  • Alberto Bagnai
  • Arsène Rieber
  • Thi Anh-Dao Tran

Abstract

Our paper examines the long-run relation between economic growth and current account equilibrium in Vietnam, using a multicountry balance-of-payments-constrained growth model. We find that for the whole sample (1985–2010) Vietnam grew less than the rate predicted by the model. We also find that the balance-of-payments-constrained growth rate shifted after the 1997 Asian crisis. Since the relative price effect is neutral, the volume effects dominate in setting the balance-of-payments constraint. On the one hand, owing to the high income elasticities of exports, growth in advanced countries has a strong multiplier effect on the Vietnamese economy. On the other hand, this effect is hindered by a strong “appetite” for imports coming from Asia. Finally, we assess the impact of the current crisis on Vietnam’s growth for the period 2011 to 2017.

Suggested Citation

  • Alberto Bagnai & Arsène Rieber & Thi Anh-Dao Tran, 2015. "Economic growth and balance-of-payments constraint in Vietnam," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(4), pages 588-615, November.
    • Handle: RePEc:mes:postke:v:38:y:2015:i:4:p:588-615
    DOI: 10.1080/01603477.2015.1087806
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    1. Il debito (che ti) pubblico
      by Alberto Bagnai in Goofynomics on 2017-02-18 23:36:00

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    Cited by:

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    3. Elodie Mania & Arsène Rieber, 2019. "Product export diversification and sustainable economic growth in developing countries," Post-Print hal-02297128, HAL.

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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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