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The Effect of Monetary Policy on Economic Growth in Lao PDR

Author

Listed:
  • Khaysy Srithilat

    (Faculty of Economics and Business Management, National University of Laos, Lao PDR,)

  • Thipphavanh Samatmanivong

    (Bank of the Lao PDR, Lao PDR,)

  • Vaiyoth Lienpaserth

    (Faculty of Economics and Business Management, National University of Laos, Lao PDR,)

  • Phiengsanith Chanthavixay

    (Faculty of Economics and Business Management, National University of Laos, Lao PDR,)

  • Visanu Boundavong

    (National Institute for Economic Research, Lao PDR.)

  • Vonsy Douangty

    (Faculty of Economics and Business Management, National University of Laos, Lao PDR,)

Abstract

The empirical analysis of this study examines the dynamic effect of monetary policy on economic growth in Lao PDR. This study uses Vector Autoregressive Model (VAR) and quarterly data from the first quarter of 1995 to the last quarter of 2018. The empirical results show a notable effect of monetary policy on economic growth in the Lao economy. An expansionary monetary leads to lower on interest rate, and increase aggregate credit and prices in the Lao economy. However, economic growth is found to be negative in responding to expansionary monetary policy.

Suggested Citation

  • Khaysy Srithilat & Thipphavanh Samatmanivong & Vaiyoth Lienpaserth & Phiengsanith Chanthavixay & Visanu Boundavong & Vonsy Douangty, 2022. "The Effect of Monetary Policy on Economic Growth in Lao PDR," International Journal of Economics and Financial Issues, Econjournals, vol. 12(1), pages 67-74.
    • Handle: RePEc:eco:journ1:2022-01-10
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary policy; Economic growth; Lao PDR;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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