The Inflation-Economic Growth Relationship: Estimating the Inflation Threshold in Vietnam

Abstract

Utilizing annual data over the period 1990-2015 and employing the threshold model developed by Sarel (1996) with some modifications, this paper estimates the inflation threshold in Vietnam and simultaneously examines the linkage between inflation and economic growth. The findings show that the estimated inflation threshold stays at 3%-4%, above which the positive effect of inflation on economic growth vanishes, and this effect starts fading at 5.5%-7.5%. The findings of this paper regarding the inflation threshold and the inflation-economic relationship are expected to help the State Bank of Vietnam (SBV) in conducting its monetary policy, especially the inflation policy. Moreover, the findings also help the government evaluate the role of the gross domestic product's determinants in promoting the economic growth.

Does weather anomaly still affect the emerging stock market under the unexpected event? New evidence from the COVID-19 pandemic

“…To be more specific, Vietnam is listed among the 11–20 nations most affected by extreme weather events from 2000 to 2019 in the Germanwatch Global Climate Risk Index 2021 report [ 11 ]. Taking the annual occurrence of strong storms, tropical depressions, below-13-degree Celsius days, heatwaves, extremely heavy rain days, and drought months as indicators for Vietnamese exposure to climate change and severe weather events, Tran [ 12 ] indicates that the exposure level in 2013 was very high, scoring 4.4 out of 5.0, and was high during the 2014–2017 period. It is evident that Vietnam is weather-sensitive, therefore, we raise the question of whether, aside from economic factors such as monetary policy, exchange rate appreciation, and GDP growth [ 13 ], the stock market is influenced by weather anomaly.…”