IDEAS home Printed from https://ideas.repec.org/a/taf/reroxx/v33y2020i1p555-578.html
   My bibliography  Save this article

Welfare consequences of inconsistent monetary policy implementation in Vietnam

Author

Listed:
  • Le Thanh Ha
  • To Trung Thanh
  • Doan Ngoc Thang

Abstract

We develop a New Keynesian model featuring Calvo price setting and Calvo wage setting to quantify the welfare consequences of shifting trend inflation in Vietnam. To capture the characteristics of the Vietnamese economy, we use the Simulated Method of Moment and calibrate parameters jointly to match the important selected moments of Vietnamese data. The results show a severe consequence of a constant positive trend inflation and an exogenous shock to trend inflation, especially when a central bank sets a high level of inflation target. Among staggered price and wage contracts, the latter play a vital role in transmitting the adverse impacts of constant and shifting trend inflation into the economy. Based on our analyses, raising inflation targets would seem to be a bad policy prescription in Vietnam.

Suggested Citation

  • Le Thanh Ha & To Trung Thanh & Doan Ngoc Thang, 2020. "Welfare consequences of inconsistent monetary policy implementation in Vietnam," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 33(1), pages 555-578, January.
  • Handle: RePEc:taf:reroxx:v:33:y:2020:i:1:p:555-578
    DOI: 10.1080/1331677X.2020.1724172
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1331677X.2020.1724172
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/1331677X.2020.1724172?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. AMODU, Muhammed Abdulasisi & ADEDAYO, Olawale Clement & AKEREDOLU, Adebisi Gabriel, 2023. "Monetary Policy and People’s Socio-Economic Welfare in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 10(06), pages 71-82, June.

    More about this item

    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:taf:reroxx:v:33:y:2020:i:1:p:555-578. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rero .

    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.