Do workers’ remittances induce inflation?the case of Vietnam, 1996-2012

Hung To Ngoc and Minh Nguyen
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Hung To Ngoc: the State Bank of Vietnam
Minh Nguyen: National Economics University

Review of Business and Economics Studies, 2014, issue 1, 38-48

Abstract: This paper seeks to examine the impact of remittances on infl in Vietnam during 1996-2012. Usingthe vector autoregressive model (VAR), we show that remittance causes infl indirectly through increasing money supply. We provide empirical evidence indicating that remittance infl ws could have a signifi impact on money supply with a one-lag quarter due to the failure of the State Bank of Vietnam in neutralizing the intervention effects on monetary base during this period. Secondly, money supply is found to accelerate infl with a two-quarter lag in Vietnam. The paper, therefore, suggests a transmission mechanism of remittance to infl in the context of a fi ed exchange rate regime.

Keywords: WORKER'S; REMITTANCE (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:scn:031730:15688963

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