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Transition, savings and growth in Vietnam: a three-gap analysis

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  • Ardeshir Sepehri

    (Department of Economics, The University of Manitoba, Winnipeg, Canada)

  • A Haroon Akram-lodhi

    (Institute of Social Studies, The Hague, The Netherlands)

Abstract

This article assesses the significance of domestic and foreign savings for Vietnam's economic growth. Using annual data for the period between 1986 and 2000 a three-gap model is formulated and estimated. The model illustrates quite vividly the centrality of the foreign exchange constraint for Vietnam's economic growth. The domestic private savings constraint is also shown to be more binding than the public savings constraint. The estimates of the foreign exchange requirements under various growth path scenarios over the period 2001-05 suggest that the increase in investment required to boost the growth rate of output results in much higher levels of external debt than that estimated by the World Bank and other donors. Copyright © 2005 John Wiley & Sons, Ltd.

Suggested Citation

  • Ardeshir Sepehri & A Haroon Akram-lodhi, 2005. "Transition, savings and growth in Vietnam: a three-gap analysis," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(4), pages 553-574.
    • Handle: RePEc:wly:jintdv:v:17:y:2005:i:4:p:553-574
    DOI: 10.1002/jid.1174
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    References listed on IDEAS

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    1. Dwayne Benjamin & Loren Brandt, 2002. "Agriculture and Income Distribution in Rural Vietnam under Economic Reforms: A Tale of Two Regions," Working Papers benjamin-02-01, University of Toronto, Department of Economics.
    2. International Monetary Fund, 2000. "Vietnam: Statistical Appendix and Background Notes," IMF Staff Country Reports 2000/116, International Monetary Fund.
    3. Bacha, Edmar L., 1990. "A three-gap model of foreign transfers and the GDP growth rate in developing countries," Journal of Development Economics, Elsevier, vol. 32(2), pages 279-296, April.
    4. International Monetary Fund, 1999. "Vietnam: Selected Issues," IMF Staff Country Reports 1999/055, International Monetary Fund.
    5. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    6. Baer, Werner & Miles, William R. & Moran, Allen B., 1999. "The end of the Asian Myth: Why were the Experts Fooled?," World Development, Elsevier, vol. 27(10), pages 1735-1747, October.
    7. Hill, Hal, 2000. "Export Success Against the Odds: A Vietnamese Case Study," World Development, Elsevier, vol. 28(2), pages 283-300, February.
    8. World Bank, 2000. "World Development Indicators 2000," World Bank Publications - Books, The World Bank Group, number 13828.
    9. International Monetary Fund, 1995. "Vietnam: Statistical Tables," IMF Staff Country Reports 1995/093, International Monetary Fund.
    10. Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
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    Cited by:

    1. Vuong, Quan-Hoang, 2017. "The Vietnamese financial economy: reforms and development, 1986-2016," OSF Preprints g7e6t, Center for Open Science.
    2. Alberto Bagnai & Arsène Rieber & Thi Anh-Dao Tran, 2015. "Economic growth and balance-of-payments constraint in Vietnam," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(4), pages 588-615, November.
    3. Anwar, Sajid & Nguyen, Lan Phi, 2011. "Foreign direct investment and trade: The case of Vietnam," Research in International Business and Finance, Elsevier, vol. 25(1), pages 39-52, January.
    4. Newman, Carol & Tarp, Finn & Van den Broeck, Katleen & Quang, Chu Tien & Khai, Luu Duc, 2008. "Household Savings in Vietnam: Insights from a 2006 Rural Household Survey," MPRA Paper 62453, University Library of Munich, Germany.
    5. repec:dau:papers:123456789/11406 is not listed on IDEAS

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