Will the growing trade gap sink Viet Nam?—Some exploratory econometrics
✍ Scribed by George Irvin; Alejandro Izurieta
- Book ID
- 101288878
- Publisher
- John Wiley and Sons
- Year
- 2000
- Tongue
- English
- Weight
- 218 KB
- Volume
- 12
- Category
- Article
- ISSN
- 0954-1748
No coin nor oath required. For personal study only.
✦ Synopsis
Viet Nam's external de®cit has risen to 10 per cent of GDP, a level which although still funded by capital in¯ows is causing alarm to donors, particularly in light of East Asia's ®nancial crisis. The paper argues that the problem may be self-correcting where capital in¯ows are directed mainly to investment, where public and private investment are complementary and investment eciency increases. Using cointegration analysis and a `general to speci®c' approach, a non-conventional econometric model is estimated using disaggregated data for imports, exports and investment from recent time series data. Finally, macroeconomic simulations are run up to 1999. The results show the trade gap narrowing signi®cantly. If these results are borne out in practice, current obstacles to trade reform and to fomenting faster private sector growth may prove easier to overcome.