Policy Options In Vietnam’s Current Context

Abstract

Recently, there have been ideas of experts and specialised agencies that Vietnam’s aggregate demand management policy should be further promoted, and that there should be measures to increase the aggregate demand. In reality, the level of impacts of demand in short term depends on the supplying capacity of the economy. If the capacity is low, the aggregate demand stimulation may lead to the increase in commodity prices and trade deficit, and the actual output may not change much. Conversely, if Vietnam’s potential growth rate is improved, it will be possible that the final aggregate demand stimulation will actually augment the output, as mentioned in Keynes’ theory. This research quantifed the influence of domestic final demand side factors on output, import, value added based on 2 Vietnam’s input output tables (I/O table). A specific calculation of impacts of factors of demand on output, outcome, and import carried out for a clearer picture of pervasiveness of final aggregate demand toward production can be considered an important base for our policy recommendation.

Keywords: Policy; Economic; Input – output table; Final demand; Income; Impact