Output-inflation Trade-off in the Presence of Foreign Capital: Evidence for Vietnam

Ly Hung

South Asian Journal of Macroeconomics and Public Finance, 2021, vol. 10, issue 2, 179-192

Abstract: On one monthly time-series data set of Vietnam economy over 02/2008–09/2018, the Time-Varying-Coefficient VAR model records that the trade-off between inflation and output growth is mitigated by the foreign capital inflows. The inflation is mostly determined by credit supply growth, while output growth is largely driven by foreign direct investment (FDI) capital inflows. A monthly increase of FDI by USD 1 billion can raise 1.77% of monthly output growth rate. The result also holds on accounting for exchange rate fluctuation. JEL Classifications: E31, F15, F36, F43

Keywords: Economic growth; inflation; foreign capital inflows; exchange rate; Vector Autoregression (VAR) model (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Working Paper: Output-Inflation Trade-Off in the Presence of Foreign Capital: Evidence for Vietnam (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:smppub:v:10:y:2021:i:2:p:179-192

DOI: 10.1177/2277978720979890

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