 On the effects of monetary policy in Vietnam: Evidence from a Trilemma analysisViet-Ngu Hoang, Duc Khuong Nguyen and Tuan Pham The World Economy, 2021, vol. 44, issue 5, 1428-1447 Abstract: During and after the 2008–09 global financial crisis, the growth cycle of Vietnam's economy has shifted from an average annual growth rate of 7%–8% to an average annual growth rate of 5%‐6% with a high level of macroeconomic instability and uncertainty from 2009 till 2016. Related studies have speculated that the operations of monetary policies during this period were not effective in recovering the economic growth and stabilising the overall price level and total output level. This paper provides the first empirical examination of this speculation using the Trilemma framework. Our empirical results show that the State Bank of Vietnam has had adopted a set of policies aiming at maintaining exchange rate stability and interest rate independence while easing the restrictions on capital inflows. The combination of these three monetary policy approaches is found to violate the rule of Trilemma. Consequently, exchange rate and interest rate policies became less effective and failed to stabilise the economy in response to the global economic recession. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:44:y:2021:i:5:p:1428-1447 Ordering information: This journal article can be ordered from Access Statistics for this article The World Economy is currently edited by David Greenaway More articles in The World Economy from Wiley Blackwell |
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