Modelling Transition and International Opening in Asia: The Case of Vietnam With a Comparison With China and the "Asian Tigers"

Alain Sand-Zantman, Jean-Louis Brillet, Cuong Le Van and Jacques Mazier
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Alain Sand-Zantman: CED, TEAM - Université Paris 1, ERUDITE - Université Paris XII
Jean-Louis Brillet: INSEE
Cuong Le Van: CERMSEM - Université Paris 1, CNRS
Jacques Mazier: CEDI, Université Paris 13

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

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

Keywords: Vietnam; multisectoral models; development; transition (search for similar items in EconPapers)
JEL-codes: E17 O53 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2000-03
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Published in Comparative Economic Studies, 42, 2000, pp. 93–130

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https://shs.hal.science/halshs-03721371 (application/pdf)
https://doi.org/10.1057/ces.2000.25

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