The Relationship between Budget Revenue - expenditure and Inflation in Vietnam: Viewed from the Results of Quantitative Analysis
Keywords:
Relationship, budget revenue - expenditure, CPI, inflation, Vietnam, quantitative analysis
Abstract
The research examines the relationship between budget revenue expenditure and inflation in Vietnam, with time series data on budget revenue expenditure and the consumer price index (CPI) (representing the inflation variable in Vietnam). Data were collected from the International Financial Statistics (IFS-IMF), General Statistics Office (GSO) in the period of 2005-2022. The author used Eview software to build a linear relationship log-log of budget revenue - -expenditure and CPI in the case of the Vietnamese economy. Quantitative analysis results show that when budget revenue increased by 1%, CPI increased by 0.249674%, when budget expenditure increased by 1%, CPI increased by 0.298316%. Raising budget revenue to raise budget expenditure will result in higher inflation during the research period in Vietnam. From the theoretical basis, research overview, and quantitative analysis results, the research team makes some recommendations for fiscal policy in Vietnam in the current context.
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References
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ISSN 1990-9233
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Hoang Van Khieu (2021). Budget deficits, money growth, and inflation: empirical evidence from Vietnam. Fulbright Review of Economics and Policy 1(1), 61-78. DOI 10.1108/FREP-05-2021-0030
Kivilcim Metin (2012). The relationship between inflation and the budget deficit in Turkey. Journal of Business & Economic Statistics, 16(4), 412-422.
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M. Solomon & W.A. De Wet (2004). The effect of a budget deficit on inflation: the case of Tanzania. South African Journal of Economic and Management Sciences 7(1)
Munir A.S Choudhary & Amar K. Parai (2006). Budget deficit and inflation: the Peruvian experience. Applied Economics, 23(6) 1117 – 1121
Muzafar Shah Habibulla, Chee – Kok Cheah, A.H.Baharom (2011). Budget deficits and inflation in Thirteen Asian developing countries. International Journal of Business and Social Science, 2(9), 192-204.
Nam, N.T (2013). The relationship between economic growth, budget deficit, and inflation in Vietnam. https://tapchitaichinh.vn/moi-quan-he-giua-tang-truong-kinh-te-tham-hut-ngan-sach-voi-lam-phat-o-viet-nam.html?fbclid=IwAR3ThF81QNXGmDWqmNWD5kkFj_uwkPJ0KihmJRS8mbQwCqEvE8l5q8PyC8g
Nguyen, H., & Nguyen, T. (2010). Macroeconomic determinants of Vietnam’s inflation 2000-2010: Evidence and analysis (VEPR Working Paper WP-09). Retrieved October 30, 2012, from http://www.undp.org.vn/digitalAssets/24/24590_InflationFinalReport-E-formatx.pdf
Nguyen Quynh Nhu (2023). The results of implementing the fiscal policy in 2022 and the direction for 2023. https://tapchinganhang.gov.vn/ket-qua-thuc-hien-chinh-sach-tai-khoa-nam-2022-va-dinh-huong-nam-2023.htm
Nguyen Thi Thai Hung, Than Thi Vi Linh (2023). Overcoming barriers to price stability in Vietnam: Current situation and policy recommendations. https://thitruongtaichinhtiente.vn/lan-at-tai-khoa-den-on-dinh-gia-ca-tai-viet-nam-thuc-trang-va-khuyen-nghi-chinh-sach-46653.html
Nguyen Van Cong (2012). Macroeconomics Course Book. Department of Macroeconomics, National Economics University. Publisher: Lao Động.
Sahan, F., (2010). A Panel Cointegration Analysis of Budget Deficit and Inflation for EU Countries and Turkey. Empirical Studies in Social Sciences. 6th International Student Conference, Izmir University of Economics, Izmir Turkey (2010).
Sargent, T. and N. Wallace (1985). Some unpleasant monetarist arithmetic. Federal Reserve Bank of Minneapolis Quarterly Review, 2: 15-31
S.O.Oladipo & T.O.Akinbobola (2011). Budget deficit and inflation in Nigeria: a casual relationship. Journal of Emerging Trends in Economics and Management Sciences 2(1). https://hdl.handle.net/10520/EJC133855
Song Tra (2023). The fiscal policy supports the economy. https://nhandan.vn/chinh-sach-tai-khoa-ho-tro-nen-kinh-te-post764930.html
Trong Tai Nguyen, Thuy Duong Phan and Ngoc Anh Tran (2022). Impact of fiscal
and monetary policy on inflation in Vietnam. Investment Management and
Financial Innovations, 19(1), 201-209. doi:10.21511/imfi.19(1).2022.15
Trung, N.H.C (2016). The relationship between inflation and the budget deficit in Vietnam. Master's thesis, University of Economics Ho Chi Minh City.
Van Bon Nguyen (2015). Effect of fiscal deficit and money M2 supply on inflation: Evidence from selected economies of Asia. Journal of Economics, Finance and Administrative Science 20(2015), 49 – 53. http://dx.doi.org/10.1016/j.jefas.2015.01.002
Vien, B.V & Tatchlerm Sudhipongpracha (2015). Exploring government budget deficit and economic growth: evidence from Vietnam’s economic miracle. Asian Affairs: An American Review, 42(3), 127 – 148. https://doi.org/10.1080/00927678.2015.1048629
ISSN 1990-9233
Bilin Neyapti (2008). Budget deficits and inflation: the roles of central bank independence and financial market development. Contemporary Economic Policy 21(4), 458-475. https://doi.org/10.1093/cep/byg025
Burdekin, C.K.R., & Wohar, E.M. (1990). Monetary institutions, budget deficits and in inflation: Empirical results for eight countries. European Journal of Political Economy, 6, 531-551.
Chinhphu. vn (2023). Fiscal policy flexibility contributes to the development of an independent and self-reliant economy. https://www.gso.gov.vn/tin-tuc-khac/2023/02/linh-hoat-chinh-sach-tai-khoa-gop-phan-xay-dung-nen-kinh-te-doc-lap-tu-chu/
David W. Findlay (2006). Budget deficits expected inflation and short–term real interest rates: evidence for the US. International Economic Journal 4(3), 41 – 53. https://doi.org/10.1080/10168739000000017
Emmanuel Duodu & partner (2022). Money supply, budget deficit and inflation dynamics in Ghana: An empirical investigation. Cogent Business & Management, 9(1), https://doi.org/10.1080/23311975.2022.2043810
Hoang Thanh Tung, Luong Xuan Duong (2019). Macroeconomics textbook. University of Labor and Social Affairs. Bach Khoa Publishing House.
Hoang Van Khieu (2021). Budget deficits, money growth, and inflation: empirical evidence from Vietnam. Fulbright Review of Economics and Policy 1(1), 61-78. DOI 10.1108/FREP-05-2021-0030
Kivilcim Metin (2012). The relationship between inflation and the budget deficit in Turkey. Journal of Business & Economic Statistics, 16(4), 412-422.
K.P.N. Tharaka Niroshan Devapriya and Masaru ICHIHASHI (2012). How does the budget deficit affect inflation in Sri Lanka? IDEC Discussion Paper 2012, Hiroshima University
Kurayish Ssebulime & Bbaale Edward (2019). Budget deficit and inflation nexus in Uganda 1980 – 2016: a cointegration and error correction modeling approach. Journal of Economic Structures, 3(2019).
Le, L., (2008). The linkage between budget deficits and inflation in Vietnam (in Vietnamese). Journal of Banking, 18, 24-35.
Lin, H.Y., & Chu, H.P. (2013). Are fiscal deficits inflationary? Journal of International
Money and Finance, 32, 214-233
Maio Bulawayo, Francis Chibwe & Venkatesh Seshamani (2018). The Impact of Budget Deficits on Inflation in Zambia. Journal of Economics and Development Studies June 2018, Vol. 6, No. 2, pp. 13-23. DOI: 10.15640/jeds.v6n2a3
Makochekanwa, Albert (2010). The impact of a budget deficit on inflation in Zimbabwe. MPRA Paper No 24227, posted 03. August 2010.
Minh, N.T.T & Duong, N.T.T (2017). Effect of budget deficit on inflation rate in Vietnam. Hue University Journal of Science Vol. 126, No. 5B, 2017, pp. 117–127. ISSN 1859-1388
M. Solomon & W.A. De Wet (2004). The effect of a budget deficit on inflation: the case of Tanzania. South African Journal of Economic and Management Sciences 7(1)
Munir A.S Choudhary & Amar K. Parai (2006). Budget deficit and inflation: the Peruvian experience. Applied Economics, 23(6) 1117 – 1121
Muzafar Shah Habibulla, Chee – Kok Cheah, A.H.Baharom (2011). Budget deficits and inflation in Thirteen Asian developing countries. International Journal of Business and Social Science, 2(9), 192-204.
Nam, N.T (2013). The relationship between economic growth, budget deficit, and inflation in Vietnam. https://tapchitaichinh.vn/moi-quan-he-giua-tang-truong-kinh-te-tham-hut-ngan-sach-voi-lam-phat-o-viet-nam.html?fbclid=IwAR3ThF81QNXGmDWqmNWD5kkFj_uwkPJ0KihmJRS8mbQwCqEvE8l5q8PyC8g
Nguyen, H., & Nguyen, T. (2010). Macroeconomic determinants of Vietnam’s inflation 2000-2010: Evidence and analysis (VEPR Working Paper WP-09). Retrieved October 30, 2012, from http://www.undp.org.vn/digitalAssets/24/24590_InflationFinalReport-E-formatx.pdf
Nguyen Quynh Nhu (2023). The results of implementing the fiscal policy in 2022 and the direction for 2023. https://tapchinganhang.gov.vn/ket-qua-thuc-hien-chinh-sach-tai-khoa-nam-2022-va-dinh-huong-nam-2023.htm
Nguyen Thi Thai Hung, Than Thi Vi Linh (2023). Overcoming barriers to price stability in Vietnam: Current situation and policy recommendations. https://thitruongtaichinhtiente.vn/lan-at-tai-khoa-den-on-dinh-gia-ca-tai-viet-nam-thuc-trang-va-khuyen-nghi-chinh-sach-46653.html
Nguyen Van Cong (2012). Macroeconomics Course Book. Department of Macroeconomics, National Economics University. Publisher: Lao Động.
Sahan, F., (2010). A Panel Cointegration Analysis of Budget Deficit and Inflation for EU Countries and Turkey. Empirical Studies in Social Sciences. 6th International Student Conference, Izmir University of Economics, Izmir Turkey (2010).
Sargent, T. and N. Wallace (1985). Some unpleasant monetarist arithmetic. Federal Reserve Bank of Minneapolis Quarterly Review, 2: 15-31
S.O.Oladipo & T.O.Akinbobola (2011). Budget deficit and inflation in Nigeria: a casual relationship. Journal of Emerging Trends in Economics and Management Sciences 2(1). https://hdl.handle.net/10520/EJC133855
Song Tra (2023). The fiscal policy supports the economy. https://nhandan.vn/chinh-sach-tai-khoa-ho-tro-nen-kinh-te-post764930.html
Trong Tai Nguyen, Thuy Duong Phan and Ngoc Anh Tran (2022). Impact of fiscal
and monetary policy on inflation in Vietnam. Investment Management and
Financial Innovations, 19(1), 201-209. doi:10.21511/imfi.19(1).2022.15
Trung, N.H.C (2016). The relationship between inflation and the budget deficit in Vietnam. Master's thesis, University of Economics Ho Chi Minh City.
Van Bon Nguyen (2015). Effect of fiscal deficit and money M2 supply on inflation: Evidence from selected economies of Asia. Journal of Economics, Finance and Administrative Science 20(2015), 49 – 53. http://dx.doi.org/10.1016/j.jefas.2015.01.002
Vien, B.V & Tatchlerm Sudhipongpracha (2015). Exploring government budget deficit and economic growth: evidence from Vietnam’s economic miracle. Asian Affairs: An American Review, 42(3), 127 – 148. https://doi.org/10.1080/00927678.2015.1048629
Published
2023-10-19
How to Cite
Nguyen, T. T. A., Nguyen, T. V. A., & Tran, N. A. M. (2023). The Relationship between Budget Revenue - expenditure and Inflation in Vietnam: Viewed from the Results of Quantitative Analysis. GPH-International Journal of Business Management, 6(10), 202-218. https://doi.org/10.5281/zenodo.10022848
Section
Articles
Copyright (c) 2023 Thanh Tu An Nguyen, Thi Van Anh Nguyen, Nguyen Anh Mai Tran
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