IDEAS home Printed from https://ideas.repec.org/p/osf/osfxxx/nhfqg.html
   My bibliography  Save this paper

How Do Fiscal-Monetary Policies Affect Economic Growth? The Case Of Vietnam

Author

Listed:
  • , Le Thanh Tung

Abstract

Tis study investigates the mixed impact of fscal-monetary policies on economic growth in Vietnam, an emerging economy in the Asia-Pacifc region. Te Vector autoregressive method (VAR), a quantitative technique, is employed on a quarterly database collected in 2004–2018. Te cointegration test indicates a long-term cointegration relationship between these macroeconomic policies and the growth of gross output. Te variance decomposition and impulse response function conclude that the impacts of these policies on economic growth are quite weak and faint. However, our results indicate that monetary policy is more signifcant than fscal policy in supporting economic growth. Te results imply that these economic policies may give priority to other macroeconomic objectives instead of promoting economic growth in the studied period. Hence, policymakers need to have more solutions to improve the efciency of these policies in Vietnam in the future.

Suggested Citation

  • , Le Thanh Tung, 2022. "How Do Fiscal-Monetary Policies Affect Economic Growth? The Case Of Vietnam," OSF Preprints nhfqg, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:nhfqg
    DOI: 10.31219/osf.io/nhfqg
    as

    Download full text from publisher

    File URL: https://osf.io/download/6338297e31d65305392ddb39/
    Download Restriction: no
    File URL: https://libkey.io/10.31219/osf.io/nhfqg?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ben S. Bernanke & Ilian Mihov, 1998. "Measuring Monetary Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(3), pages 869-902.
    2. Sims, Christopher A, 1994. "A Simple Model for Study of the Determination of the Price Level and the Interaction of Monetary and Fiscal Policy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(3), pages 381-399.
    3. Robert J. Barro & Charles J. Redlick, 2011. "Macroeconomic Effects From Government Purchases and Taxes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(1), pages 51-102.
    4. John B. Taylor, 1995. "The Monetary Transmission Mechanism: An Empirical Framework," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 11-26, Fall.
    5. James H. Stock & Mark W. Watson, 2001. "Vector Autoregressions," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 101-115, Fall.
    6. Goran Petrevski & Borce Trenovski & Biljana Tashevska, 2019. "The effectiveness of fiscal and monetary policies in a small open economy – the case of Macedonia," Post-Communist Economies, Taylor & Francis Journals, vol. 31(6), pages 805-821, November.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    8. Tomislav Ćorić & Hrvoje Šimović & Milan Deskar-Škrbić, 2015. "Monetary and fiscal policy mix in a small open economy: the case of Croatia," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 28(1), pages 407-421, January.
    9. Dungey, Mardi & Fry, Renée, 2009. "The identification of fiscal and monetary policy in a structural VAR," Economic Modelling, Elsevier, vol. 26(6), pages 1147-1160, November.
    10. Adeola Y. Oyebowale & Amr S. Algarhi, 2020. "Macroeconomic determinants of economic growth in Africa," International Review of Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 839-857, November.
    11. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1329-1368.
    12. Akhand Akhtar Hossain, 2015. "Inflation volatility, economic growth and monetary policy in Bangladesh," Applied Economics, Taylor & Francis Journals, vol. 47(52), pages 5667-5688, November.
    13. Shahid Ali & Somia Irum & Asghar Ali, 2008. "Whether Fiscal Stance or Monetary Policy is Effective for Economic Growth in Case of South Asian Countries?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 791-799.
    14. Goran Petrevski & Jane Bogoev & Dragan Tevdovski, 2016. "Fiscal and monetary policy effects in three South Eastern European economies," Empirical Economics, Springer, vol. 50(2), pages 415-441, March.
    15. Junxue Jia & Jing Guo & Zijie Wang, 2015. "The Fiscal-Monetary Policy Mix and Exchange Rate Stability: A Dynamic Stochastic General Equilibrium Model With Chinese Characteristics," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(4), pages 729-746, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Goran Petrevski & Borce Trenovski & Biljana Tashevska, 2019. "The effectiveness of fiscal and monetary policies in a small open economy – the case of Macedonia," Post-Communist Economies, Taylor & Francis Journals, vol. 31(6), pages 805-821, November.
    2. Vladimir Filipovski & Taki Fiti & Borce Trenovski, 2016. "Efficiency of the Fiscal Policy and the Fiscal Multipliers – The Case of the Republic of Macedonia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 3-23.
    3. Andrew Mountford & Harald Uhlig, 2009. "What are the effects of fiscal policy shocks?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(6), pages 960-992.
    4. Mai, Nhat Chi, 2014. "Monetary transmission mechanism analysis in a small, open economy: the case of Vietnam," OSF Preprints ybc8p, Center for Open Science.
    5. Dragan Tevdovski & Goran Petrevski & Jane Bogoev, 2019. "The effects of macroeconomic policies under fixed exchange rates: A Bayesian VAR analysis," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 2138-2160, January.
    6. Alexander Ljungqvist & Michael Smolyansky, 2014. "To Cut or Not to Cut? On the Impact of Corporate Taxes on Employment and Income," NBER Working Papers 20753, National Bureau of Economic Research, Inc.
    7. Groenewold, Nicolaas, 2018. "Australia saved from the financial crisis by policy or by exports?," Journal of Policy Modeling, Elsevier, vol. 40(1), pages 118-135.
    8. Shafik Hebous, 2011. "The Effects Of Discretionary Fiscal Policy On Macroeconomic Aggregates: A Reappraisal," Journal of Economic Surveys, Wiley Blackwell, vol. 25(4), pages 674-707, September.
    9. Jerome Creel & Paola Monperrus-Veroni & Francesco Saraceno, 2005. "Discretionary Policy Interactions and the Fiscal Theory of the Price Level: A SVAR Analysis on French Data," Documents de Travail de l'OFCE 2005-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    10. Şen, Hüseyin & Kaya, Ayşe, 2015. "The relative effectiveness of Monetary and Fiscal Policies on growth: what does long-run SVAR model tell us?," MPRA Paper 65903, University Library of Munich, Germany, revised 01 Aug 2015.
    11. Ramey, V.A., 2016. "Macroeconomic Shocks and Their Propagation," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 71-162, Elsevier.
    12. Moneta, Alessio & Pallante, Gianluca, 2022. "Identification of Structural VAR Models via Independent Component Analysis: A Performance Evaluation Study," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    13. Ahiteme N. Houndonougbo & Matthew N. Murray, 2019. "Millionaires or Job Creators: What Really Happens to Employment Growth When You Stick It to the Rich?," Public Finance Review, , vol. 47(1), pages 112-141, January.
    14. Sergio Sola, 2013. "Temporary and Persistent Fiscal Policy Shocks," IHEID Working Papers 06-2013, Economics Section, The Graduate Institute of International Studies.
    15. Hernán Rincón & Diego Rodríguez & Jorge Toro & Santiago Téllez, 2017. "FISCO: modelo fiscal para Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 35(83), pages 161-187, June.
    16. Osti, Davide, 2013. "The Macroeconomic Effects of Tax Changes: Evidence from Southern European Regions," MPRA Paper 79892, University Library of Munich, Germany.
    17. Nicolaas Groenewold, 2012. "Australia and the GFC: Saved by Astute Fiscal Policy?," Economics Discussion / Working Papers 12-28, The University of Western Australia, Department of Economics.
    18. Goran Petrevski & Jane Bogoev & Dragan Tevdovski, 2016. "Fiscal and monetary policy effects in three South Eastern European economies," Empirical Economics, Springer, vol. 50(2), pages 415-441, March.
    19. António Afonso & Jaromír Baxa & Michal Slavík, 2018. "Fiscal developments and financial stress: a threshold VAR analysis," Empirical Economics, Springer, vol. 54(2), pages 395-423, March.
    20. P. A. Nazarov & Kazakova, Maria, 2014. "Theoretical Basis of Prediction of Main Budget Parameters of Country," Published Papers r90221, Russian Presidential Academy of National Economy and Public Administration.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osf:osfxxx:nhfqg. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: OSF (email available below). General contact details of provider: https://osf.io/preprints/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.