Impact of fiscal and monetary policy on inflation in Vietnam

Tai, Nguyen Trong; Phan, Thuy Duong; Tran, Ngoc Anh Thu

doi:10.21511/imfi.19(1).2022.15

Cited by 11 publications

(10 citation statements)

References 41 publications

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“…Despite its use as a countercyclical tool to stimulate economic growth, monetary policy can also lead to an increase in prices due to an increase in money supply. This outcome is consistent with the findings of previous studies (Arintoko & Kadarwati, 2022;Nyumuah, 2018;Abbasinejad et al, 2018;Sethi et al, 2019;Mandel et al, 2019;Arintoko, 2021;Tai Nguyen et al, 2022).…”

Section: Discussionsupporting

confidence: 93%

“…The relationship between economic growth and monetary policy, specifically the role of policy interest rates, was extensively examined by (Arintoko & Kadarwati, 2022) using the VAR method, which showed that policy interest rates respond positively to unexpected GDP changes. Previous studies have suggested that monetary policy plays a crucial role in regulating economic growth, inflation, and exchange rates (Nyumuah, 2018); (Abbasinejad et al, 2018); (Sethi et al, 2019); (Mandel et al, 2019) (Arintoko, 2021); (Tai Nguyen et al, 2022). (Kim & Lim, 2018) and (Kim et al, 2020) note that monetary policy shocks can affect exchange rates.…”

Section: Theoretical Reviewmentioning

confidence: 99%

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Impact Analysis Of Monetary And Fiscal Policies On Indonesia’s Economic Growth

Rachmawaty,

Oktrima,

Waluyo Jati

2024

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After the Covid-19 pandemic, the world faced economic challenges stagflation, namely high inflation and declining economic growth. To overcome this, the Government made arrangements through monetary and fiscal policies. This study analyses the effect of monetary and fiscal policies on Indonesia's economic growth. This research has eight obtained monetary, fiscal and other macro-economic variables, a novelty compared to the previous researcher. Based on the impulse response analysis in the Vector Error Correction Model, the highest impacted variables to maintain economic growth were the growth of income tax and capital market index, and to negatively impact were exchange money and government expenditure. Over an extended period, it shows that the increase in inflation, money exchange, number of broad-money, interest rate, and government expenditure will impact the decrease of economic growth. In contrast, the increase in government income from tax and capital market indexes will impact the increase in economic growth.

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Section: Discussionsupporting

confidence: 93%

Section: Theoretical Reviewmentioning

confidence: 99%

Impact Analysis Of Monetary And Fiscal Policies On Indonesia’s Economic Growth

Rachmawaty,

Oktrima,

Waluyo Jati

2024

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“…Various structural shocks that drive high inflation such as inflation shocks, output shocks, and exchange rate shocks are of greater concern to the central bank In many studies, monetary policy has an impact that includes the impact on output, inflation, and exchange rates. This empirical evidence is provided in studies conducted by, among others, Nyumuah (2018), Abbasinejad et al (2018), Sethi et al (2019), Mandel et al (2019), and Tai Nguyen et al (2022). The results of a study by Arintoko (2021) imply the important role of monetary policy in stabilizing output and inflation in the short run and stabilizing inflation in the long run.…”

Section: Introductionmentioning

confidence: 89%

Does Monetary Policy Respond to Macroeconomic Shocks? Evidence from Indonesia

Arintoko¹,

Kadarwati²

2022

JESP

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The activist policy is believed by policymakers and economists that monetary policy can respond to macroeconomic shocks to stabilize the economy. This study aims to find evidence and discuss the response of monetary policy to macroeconomic shocks. For this reason, the effects of GDP shocks, inflation shocks, and exchange rate shocks on policy interest rates in the implementation of monetary policy are discussed through vector error correction model (VECM) analysis along with policy interest rate responses involving the long-run relationships. The study period 2001Q1 – 2020Q1 is used as the policy implementation period using the policy interest rate. The results of the analysis show that based on the magnitude of the impact and its contribution, inflation shock and exchange rate shock are the most important macroeconomic variable shocks in influencing the monetary policy stance in Indonesia. Inflation shocks and exchange rate shocks need to be a priority focus for monetary policymakers in an economic environment where uncertainty is increasing and rapidly changing. In addition to the interests of the domestic economy, monetary policy also needs to remain focused on considering and adapting to increasingly dynamic global economic and financial developments.

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“…The decisive role of the monetary policy of central banks in ensuring the regulation of inflation has been repeatedly proven by international researchers (Nguyen et al, 2022;Suhendra & Anwar, 2022). In particular, the importance of anti-inflationary policies in ensuring financial stability and macroeconomic growth has been established (Kerimov et al, 2023b).…”

Section: Literature Reviewmentioning

confidence: 99%

Central bank independence as a prerequisite for ensuring price stability: Modeling the role of the national pattern

Kerimov,

Babayev,

Dudchenko

et al. 2023

Banks and Bank Systems

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Ensuring price stability is a dominant function of the central bank. Empirical studies on various statistical samples give conflicting results regarding the influence of central bank independence on the inflation rate. The study offers a methodology for assessing the role of the formation of a national pattern of central bank independence in ensuring price stability. Calculations were made for 53 countries of the world using a combination of cluster analysis tools and panel regression modeling. The cluster analysis carried out at different time intervals of the study allowed defining three patterns of the formation of central bank independence. The changes in the clusters characterizing the peculiarities of the national patterns of central bank independence shows that for a number of countries there is no stable national pattern. Modeling based on panel data showed that when forming a country pattern “Limited level of central bank independence”, an increase in the level of independence of the central bank by one unit on average leads to an increase in the inflation rate by 7.09%. On the other hand, in the countries with the national patterns of central bank independence “Dominance of the institutional and financial component of ensuring the independence of the central bank” and “Dominance of the personal and functional component of ensuring the independence of the central bank”, the expected consequence of increasing the level of independence of the central bank by one unit is to reduce the inflation rate by an average of 3.32% and 6.03%, respectively.

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Impact of fiscal and monetary policy on inflation in Vietnam

Cited by 11 publications

References 41 publications

Impact Analysis Of Monetary And Fiscal Policies On Indonesia’s Economic Growth

Impact Analysis Of Monetary And Fiscal Policies On Indonesia’s Economic Growth

Does Monetary Policy Respond to Macroeconomic Shocks? Evidence from Indonesia

Central bank independence as a prerequisite for ensuring price stability: Modeling the role of the national pattern

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