Vietnam's Long-run Growth: Connecting the Dots through Climate Damage Spillovers

Elodie Mania (), Thi Thu-Ha Nguyen (), Arsène Rieber () and Thi Anh-Dao Tran ()
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Elodie Mania: LASTA, University of Rouen Normandy, Faculty of Law, Economics and Management, France, Postal: University of Rouen Normandy 3 avenue Pasteur, CS 46186 F-76186 Rouen Cedex 1 France
Thi Thu-Ha Nguyen: World Bank in Vietnam, Hanoi, Vietnam, Postal: World Bank in Vietnam 63 Ly Thai To Street Hanoi Vietnam
Arsène Rieber: LASTA, University of Rouen Normandy, Faculty of Law, Economics and Management, France, Postal: University of Rouen Normandy 3 avenue Pasteur, CS 46186 F-76186 Rouen Cedex 1 France
Thi Anh-Dao Tran: LASTA, University of Rouen Normandy, Faculty of Law, Economics and Management, France, Postal: University of Rouen Normandy, 3, avenue, Pasteur CS 46186 F-76186 Rouen Cedex 1 France and Research Institute on Contemporary Southeast Asia (IRASECCNRS), 179 Thanon Witthayu Lumphini Pathum Wan Bangkok 10330 Thailand

Journal of Economic Integration, 2024, vol. 39, issue 1, 227-252

Abstract: We propose to examine how climate damage may transform Vietnam's long-run growth rate. Because of cross-country linkages forged by bilateral trade, there are two channels through which international damage spillovers may occur. First, the dynamics of partners' growth determine future trends in Vietnam's volume of exports. Second, since the domestic impact of climate change may be heterogeneous across countries, there will be a differentiated impact on export and import market shares. Both terms play a critical role in changing trade patterns that are likely to shift Vietnam's external constraint. This demand-side view of growth based on the balance-of-payments constraint is a powerful predictor of inter-country growth differences. Our study show that the consequences of climate change could equate to a 2.5% reduction in Vietnam's growth rate over the period 2020-2060. Our decomposition exercise by effect and by partner area shows that international damage spillovers result from very different individual behaviours.

Keywords: balance-of-payments-constrained growth model; climate change adaptation international damage spillovers macroeconomic resilience Vietnam (search for similar items in EconPapers)
JEL-codes: E12 F43 F62 O57 Q01 Q54 (search for similar items in EconPapers)
Date: 2024
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