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Impact of fiscal and monetary policy on economic growth in Vietnam

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  • , Le Thanh Tung

Abstract

This paper uses the Johansen cointegration test and the Vector Error Correction Model (VECM) to study the impact of fiscal and monetary policy on economy growth in Vietnam during the period from quarter I/2004 to quarter II/2013. The results showed the cointegration relation between the macroeconomic policies and economic growth. Besides, the variance decomposition and impulse response functions from VECM model showed the impact of the two policies on economic growth were limited, in which the impact of the monetary policy on growth is greater than that of the fiscal policy on growth. Subsequently, the paper provides some recommendations to improve the efficiency of the implementation of these policies in Vietnam.

Suggested Citation

  • , Le Thanh Tung, 2014. "Impact of fiscal and monetary policy on economic growth in Vietnam," OSF Preprints b8729_v1, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:b8729_v1
    DOI: 10.31219/osf.io/b8729_v1
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    1. Shahid Ali & Naved Ahmad, 2010. "The Effects of Fiscal Policy on Economic Growth: Empirical Evidences Based on Time Series Data from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 497-512.
    2. Hameed, Irfan & Ume, Amen, 2011. "Impact of monetary policy on gross domestic product (GDP)," MPRA Paper 35562, University Library of Munich, Germany.
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