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Economic growth and balance of payments constraint in Vietnam

Author

Listed:
  • A. Bagnai

    (Department of Economics, University ‘Gabriele D’Annunzio’, Chieti, Italy)

  • A. Rieber

    (Department of Economics, University of Rouen, France)

  • T.A.D. Tran

    (DIAL, Institute of Research for Development, Vietnam)

Abstract

Our paper examines the long run relationship in Vietnam between economic growth and the current account balance equilibrium by relying on the BoP constrained growth model. We find that Vietnam grew less than the rate predicted when the period 1985 to 2010 as a whole is considered, but with different behavior for the 1998-2010 sub-period. The relative price effect is neutral, allowing the volume effects to dominate in setting the BoP constraint. The high income elasticities of exports enable growth in the advanced countries to have a multiplier effect on the Vietnamese economy. However, this effect is hindered by a high ‘appetite’ for imports coming from Asia. We also assess the impact of the current crisis on Vietnam’s growth for the period 2011 to 2017.

Suggested Citation

  • A. Bagnai & A. Rieber & T.A.D. Tran, 2013. "Economic growth and balance of payments constraint in Vietnam," Working Papers 163, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:1313
    DOI: 10.1080/01603477.2015.1087806
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    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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    2. Mania, Elodie & Rieber, Arsène, 2019. "Product export diversification and sustainable economic growth in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 138-151.
    3. Woocheol Lee, 2021. "Structural Change, Balance of Payments Constraint, and Economic Growth: Evidence from Vietnam," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(4), pages 631-653, December.
    4. Elodie Mania & Arsène Rieber, 2019. "Product export diversification and sustainable economic growth in developing countries," Post-Print hal-02297128, HAL.

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    Keywords

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    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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