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Assessing the price and output effects of monetary policy in Vietnam: evidence from a VAR analysis

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  • Thi Mai Lan Nguyen
  • Elissaios Papyrakis
  • Peter A.G Van Bergeijk

Abstract

Using monthly data, we perform a vector-autoregressive analysis to measure the effects of monetary policy on the Vietnamese economy. We concentrate our attention on the period following the introduction of the Law on Central Bank in January 1998 (which brought the national monetary policy and its objectives in line with international practices). Contrary to previous studies on Vietnam, we find evidence suggesting that monetary policy (through the manipulation of interest rates) is an effective policy tool in stabilizing prices. However, credit growth tends to induce inflationary pressures. In addition, we find that an expansion of broad money supply leads to an increase in industrial production.

Suggested Citation

  • Thi Mai Lan Nguyen & Elissaios Papyrakis & Peter A.G Van Bergeijk, 2019. "Assessing the price and output effects of monetary policy in Vietnam: evidence from a VAR analysis," Applied Economics, Taylor & Francis Journals, vol. 51(44), pages 4800-4819, September.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:44:p:4800-4819
    DOI: 10.1080/00036846.2019.1602708
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    Cited by:

    1. Lan Nguyen, Thi Mai & Papyrakis, Elissaios & van Bergeijk, Peter A.G., 2021. "Publication bias in the price effects of monetary policy: A meta-regression analysis for emerging and developing economies," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 567-583.
    2. Bac Cong Truong & Phan Quan Viet & Vu Thi Kim Hanh & Ho Thi Phuong Thao & Le Huong Duong & Nguyen Ho Viet Anh, 2020. "Highlights in Managing Monetary Policy of Vietnam in Post-Crisis Period," Journal of Asian Development, Macrothink Institute, vol. 6(1), pages 1-16, April.
    3. Mohammad Reza Farzanegan & Reza Zamani, 2024. "The Effect of Corruption on Internal Conflict in Iran Using Newspaper Coverage," Defence and Peace Economics, Taylor & Francis Journals, vol. 35(1), pages 24-43, January.
    4. Nguyen, Hoai Thi Thanh & Tram, Huong Thi Xuan & Nguyen, Linh Thi Thuy, 2023. "Interest rates and systemic risk:Evidence from the Vietnamese economy," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    5. Betchani H. M. Tchereni & Ahmad Makawa & Fredrick Banda, 2022. "Effectiveness of the Asset Price Channel as a Monetary Policy Transmission Mechanism in Malawi: Evidence from Time Series Data," International Journal of Economics and Financial Issues, Econjournals, vol. 12(5), pages 160-168, September.
    6. Sanjeev Parmanand, 2022. "The impact of Philippine monetary policy on domestic prices and output: evaluating the country’s transmission channels," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 59(1), pages 46-76, June.
    7. López, Ramón & Sepúlveda, Kevin A., 2022. "The effects of domestic demand shocks on inflation in a small open economy: Chile in the period 2000–2021," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

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