Budget Deficit, Money Growth and Inflation: Empirical Evidence from Vietnam

Khieu, Hoang

doi:10.2139/ssrn.2428039

Cited by 6 publications

(5 citation statements)

References 14 publications

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“…Tekin- Koru and Özmen (2003) found that monetary growth had a positive impact while budget deficit had a no effect on inflation in the case of Turkish. The findings of Tekin-Koru and Özmen ( 2003) were similar with Khieu (2014) in Vietnem and Mukhtar and Zakaria (2010) in Pakistan. By investigating the granger causality effects of these two policies on inflation, Lozano-Espitia ( 2008) discovered that budget deficit granger cause monetary growth and subsequently, monetary growth to cause inflation in Colombia.…”

Section: Empirical Evidence On the Relationship Between The Monetary Policy Fiscal Policy And Inflationmentioning

confidence: 54%

Monetary and Fiscal Policies on Inflation: Evidence From Precrisis and Post-Crisis Periods in Thailand

Tan¹,

Azali²

2019

IJBMER

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The purpose of this study is to examine the long-run relationship monetary and fiscal policy on inflation in Thailand by employing an Autoregressive Distributed Lag (ARDL). This study uses quarterly data from 1980: Q1 to 2017:Q1 and divides the sample data into pre-crisis period (1980Q1-1997Q3) and post crisis period (1997Q4-2017Q1). The results revealed that the longrun relationship between government spending and inflation was positive. The results implied that government spending was one of the important components when determining the inflation. However, interest rate was positive in pre-crisis and negative in post-crisis. The results indicated that monetary policy is more effective on inflation in the post-crisis period. Both pre-crisis and post-crisis period show that fiscal policy is more effective in influencing the inflation in Thailand. These results suggest that inflation in Thailand inflation is highly sensitive to the change in monetary and fiscal policies, especially as it emerges from a financial crisis.

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Section: Empirical Evidence On the Relationship Between The Monetary Policy Fiscal Policy And Inflationmentioning

confidence: 54%

Monetary and Fiscal Policies on Inflation: Evidence From Precrisis and Post-Crisis Periods in Thailand

Tan¹,

Azali²

2019

IJBMER

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“…Specifically, inflation should rise for three months regarding a positive shock to money growth. Besides, the second month from the shock is the time when the positive shock to the money supply has the strongest effect on inflation (Khieu, 2014). Nguyen (2015) affirms that most studies prove the strong effect of monetary support on inflation.…”

Section: Literature Reviewmentioning

confidence: 61%

“…Money supply has been shown to be a vital factor that increased inflation with data from January 2001 to February 2009 in Vietnam (Nguyen et al, 2012). Also, in Vietnam, Khieu (2014) proves that monetary growth positively affects the inflation rate. Specifically, inflation should rise for three months regarding a positive shock to money growth.…”

Section: Literature Reviewmentioning

confidence: 97%

“…Cuong (2019) also believes that the government must follow a stricter fiscal policy to balance the national budget over time. Also, in Vietnam, Khieu (2014) used data gathered monthly from January 1995 to December 2012 together with the structural vector autoregressive model. The research results show that the national budget deficit does not affect the money supply and therefore has no impact on inflation.…”

Section: Literature Reviewmentioning

confidence: 99%

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Impact of fiscal and monetary policy on inflation in Vietnam

Tai

Phan

Tran

2022

Investment Management and Financial Innovations

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High and sustainable growth of gross domestic product with stable inflation is one of the objectives of the most macroeconomic policies both in the world and in Vietnam. Therefore, price stability plays a vital role in assuring GDP growth. In order to stabilize prices, fiscal and monetary policies need to be appropriately managed. The aim of this study is to assess the impact of the monetary and fiscal policies on inflation in Vietnam during the period from 1997 to 2020. This study has applied the vector autoregression (VAR) model along with data gathered from the World Bank and General Statistics Office of Vietnam. The research results indicate that Vietnam’s inflation is positively influenced by a fiscal deficit (2.943), money supply (2.672), government expenditure (8.347), and interest rate (3.187). Among the factors, government expenditure has the biggest influence on inflation. Besides, trade openness (–0.311) also influences inflation, but the effect is negative and negligible. Finally, the policy implications are focused on coordinating fiscal and monetary policies maintaining a moderate level of inflation for economic growth. AcknowledgmentThis article is funded from the funding source of the research: “Solutions to deal with the risk of financial instability from support packages to fight economic recession caused by the covid-19 pandemic” with code B2022-MHN-02 by Vietnam Misnistry of Education and Training.

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“…The empirical results show an overall increase in public expenditure causes an increase in the rate of unemployment. Khieu (2014) investigates the relationship between budget deficit, money supply, and inflation.…”

Section: Literature Reviewmentioning

confidence: 99%

Public Policy and Economic Misery Nexus: A Comparative Analysis of Developed and Developing World

Audi

Ali

2023

IJEFI

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Minimizing the level of economic misery is one of the prime objectives of all economies for the last couple of decades. It is not individuals who can themselves control it, some public policy options provide roots to minimize economic misery. This article has examined the role of public policy in determining the level of economic misery among developed and developing countries from 1987 to 2019. The empirical findings of the article show level of domestic investment, foreign debt, and government revenue are discouraging economic misery among developing countries. Whereas economic development and the level of the population are encouraging economic misery among developing countries. The level of domestic investment is promoting economic misery in developed countries, but government revenue and economic development are reducing economic misery among developed countries. In the case of the whole sample analysis, the level of domestic investment and government revenues decreases the level of economic misery, but the level of population, foreign debt, and economic development depresses the economic misery. Thus, it is concluded that public policy plays important role in determining economic misery both in developed and developing countries. Developing countries should raise the level of domestic investment and government revenue to depress economic misery. Developed countries should raise government revenue and economic development to depress economic misery. So, for the reduction of economic misery in developed and developing countries, public policy must be strengthened.

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Budget Deficit, Money Growth and Inflation: Empirical Evidence from Vietnam

Cited by 6 publications

References 14 publications

Monetary and Fiscal Policies on Inflation: Evidence From Precrisis and Post-Crisis Periods in Thailand

Monetary and Fiscal Policies on Inflation: Evidence From Precrisis and Post-Crisis Periods in Thailand

Impact of fiscal and monetary policy on inflation in Vietnam

Public Policy and Economic Misery Nexus: A Comparative Analysis of Developed and Developing World

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