Inflation Dynamics and Monetary Policy Transmission in Vietnam and Emerging Asia

23 Pages Posted: 31 Jul 2013

Date Written: July 2013


This paper provides an overview of inflation developments in Vietnam in the years following the doi moi reforms, and uses empirical analysis to answer two key questions: (i) what are the key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why has inflation in Vietnam been persistently higher than in most other emerging market economies in the region? It focuses on understanding the monetary policy transmission mechanism in Vietnam, and in understanding the extent to which monetary policy can explain why inflation in Vietnam has been higher than in other Asian emerging markets over the past decade.

Keywords: Inflation, Vietnam, Monetary policy, Asia, Emerging markets, Economic models, inflation, inflation, monetary policy effectiveness, emerging Asian economies, monetary policy, nominal interest rate, money supply, price inflation, inflationary pressures, monetary aggregates, aggregate demand, increase in inflation, real output, inflation dynamics, monetary fund, inflationary expectations, monetary policy transmission mechanism, high inflation, inflation rate, reserve requirement, price stability, inflation equation, open market operations, inflation rising, inflation rates, money growth, monetary policy framework, foreign currency, money demand, rate of inflation, nominal interest rates

JEL Classification: E31, E41, E52

Suggested Citation

Bhattacharya, Rina, Inflation Dynamics and Monetary Policy Transmission in Vietnam and Emerging Asia (July 2013). IMF Working Paper No. 13/155, Available at SSRN:

Rina Bhattacharya (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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