Remittance and Inflation - An Empirical Study for Vietnam

Nguyen Thi Hong Hai and Thang Doan

Asian Journal of Economic Modelling, 2017, vol. 5, issue 2, 186-193

Abstract: Remittances have recently received such a great attention as private monetary flows that its monetary nature seems to be disregarded. The issue that whether remittance flows are inflationary, resulting in a change in relative price, remains controversial. This study utilizes a reduced-form VAR model to investigate the inflation’s response to a positive shock to the remittance based on Ball et al. (2009)’s study. We use a quarterly data from 1st quarter 1996 to 3rd quarter 2012. The main findings are that first, there exists a positive effect of remittance on inflation in Vietnam and this effects prolong up to three quarters; second others main macroeconomic factors also affect inflation but at a lower magnitude compared with remittances.

Keywords: Macroeconomic; Inflation; Remittance; VAR; Reduced-form. (search for similar items in EconPapers)
Date: 2017
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