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Inflation Structure in Vietnam Economy

Author

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  • Ly Dai Hung

    (Vietnam Institute of Economics, Hanoi, Vietnam)

Abstract

The paper investigates the structure of inflation in the Vietnam economy, as a developing economy with a strong record of low inflation and high economic growth rate over recent years, even during the recent Covid-19 pandemic. Methodology: The paper uses a quantitative analysis which investigates the quarterly dataset of inflation for the Vietnam economy over 1990-2021. The inflation is decomposed into three main components including core inflation, energy inflation and food inflation. Findings: The evidence records that the main driver of inflation in the Vietnam economy is the food inflation. Moreover, both energy and food inflation tends to have a large deviation over time. This illustrates the impact of the world commodity market on domestic inflation. The core inflation, however, is quite stable over time, reflecting the effectiveness of monetary policy in the Vietnam economy. Implications: The results implies that the food inflation can be a prioritized objective for the Vietnam economy to stabilize the domestic inflation. Moreover, the monetary policy, which affects the core inflation, needs to be combined with the fiscal policy, which affects the energy inflation.

Suggested Citation

  • Ly Dai Hung, 2022. "Inflation Structure in Vietnam Economy," Working Papers hal-03863173, HAL.
  • Handle: RePEc:hal:wpaper:hal-03863173
    Note: View the original document on HAL open archive server: https://hal.science/hal-03863173
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    References listed on IDEAS

    as
    1. Ly Dai Hung, 2021. "Output-inflation Trade-off in the Presence of Foreign Capital: Evidence for Vietnam," South Asian Journal of Macroeconomics and Public Finance, , vol. 10(2), pages 179-192, December.
    2. José De Gregorio, 2012. "Commodity Prices, Monetary Policy, and Inflation†," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 60(4), pages 600-633, December.
    3. José de Gregorio, 2012. "Commodity Prices, Monetary Policy and Inflation," Working Papers wp359, University of Chile, Department of Economics.
    4. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation Rate; Economic Growth; Pandemic; Quantitative Analysis; Qualitative Analysis; Vietnam economy;
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