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Fiscal deficit has been sharply increasing in the developing economies worldwide. This paper examines the effect of fiscal deficit on economic growth in Vietnam, the country now is one of the most dynamically emerging countries, but its government has been facing large fiscal deficits for many years by now. Our study has applied the Error Correction model on the quarterly data of 2003-2016. The empirical results strongly indicate there is a cointegration relationship between fiscal deficit and economic growth in Vietnam, in which fiscal deficit had harmful effects on economic growth in both short and long run. In particular, the correlation analysis has confirmed that fiscal deficit can hurt not only the gross output but also private investments, foreign direct investments, and net exports. Our results provide evidence for policymakers, and not only in Vietnam but also in other emerging countries which are in need of urgent solutions so that to reduce the fiscal deficit rate and have more sustainable growth in the future.

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Despite the sharply increasing remittances in developing countries (especially in the AsiaPacific region), the relationship between remittances and domestic investment in recipient countries has not been fluently evidenced. This paper aims to fill the empirical gap in the Asia-Pacific region by investigating the impact of remittances on domestic investment with a sample including nineteen developing countries based on time series data from 1980 to 2015. However, our findings contradict some evidence from other regions. The results robustly confirm that remittances have a negative impact on domestic investment in these countries. Our results also indicate that the annual GDP per capita growth, official development assistance, domestic credit, gross saving, and inflation have a positive impact on domestic investment, however, we conclude that the impact of trade openness on domestic investment has a negative sign in the study period. The paper also provides some policy suggestions with regard to remittance flows in this region.