HOW DO FISCAL-MONETARY POLICIES AFFECT ECONOMIC GROWTH? THE CASE OF VIETNAM
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http://orcid.org/0000-0001-8487-2217
Abstract
This study investigates the mixed impact of fiscal-monetary policies on economic growth in Vietnam, an emerging economy in the Asia-Pacific region. The Vector autoregressive method (VAR), a quantitative technique, is employed on a quarterly database collected in 2004–2018. The cointegration test indicates a long-term cointegration relationship between these macroeconomic policies and the growth of gross output. The variance decomposition and impulse response function conclude that the impacts of these policies on economic growth are quite weak and faint. However, our results indicate that monetary policy is more significant than fiscal policy in supporting economic growth. The results imply that these economic policies may give priority to other macroeconomic objectives instead of promoting economic growth in the studied period. Hence, policymakers need to have more solutions to improve the efficiency of these policies in Vietnam in the future.
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