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Modelling Transition and International Opening in Asia: The Case of Vietnam with a Comparison with China and the «Asian Tigers»

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  • Alain Sand-Zantman

    (TEAM - Théories et Applications en Microéconomie et Macroéconomie - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Jean-Louis Brillet

    (Institut national de la statistique et des études économiques (INSEE))

  • Cuong Le Van

    (CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Jacques Mazier

    (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper describes the multisectoral macroeconomic model of a small developing economy in transition, in order to highlight linkages between agriculture and the rest of the economy, and consequences of external opening up. Agriculture is a supply sector, sticky in the short range with market clearning by price adjustment. The non agricultural sector is demand-led, with imperfect competition (and hence sticky prices and indexed nominal wages). According to this dual theoretical pattern, labor market is segmented with an unlimited supply in the rural area. This part of labor force is employed in the agricultural sector and in the rural non agricultural one. Urban workers are employed in the non agricultural sector but may face unemployment. The wage gap between urban and rural areas induces migration, according to a Harris Todaro mechanism. This framework is applied to the Vietnam case. A calibrated quantitative model performs a base line simulation from 1993 to 2010, following approximately the path designed by the Vietnamese government. Finally, this model is used to sketch various scenarios, among which traditional macroeconomic packages, structural reforms, and external shocks.

Suggested Citation

  • Alain Sand-Zantman & Jean-Louis Brillet & Cuong Le Van & Jacques Mazier, 2000. "Modelling Transition and International Opening in Asia: The Case of Vietnam with a Comparison with China and the «Asian Tigers»," Post-Print halshs-03721371, HAL.
    • Handle: RePEc:hal:journl:halshs-03721371
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03721371
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    References listed on IDEAS

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    1. Mr. Torsten M Sloek & Mr. Sanja Kalra, 1999. "Inflation and Growth in Transition: Are the Asian Economies Different?," IMF Working Papers 1999/118, International Monetary Fund.
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    6. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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