The impacts of money policy on growth and inflation in Vietnam: Results from the VAR model

In the article, based on empirical research using the VAR model, the authors examine the influence of monetary policy on growth and inflation in Vietnam in the period 2008-2017. The results show that, when applying broad monetary policy, interest rates will reduce, the currency devaluated in the first quarter in accordance with the theory. CPI remained unchanged in the first quarter then rose in the next quarter, output declined slightly in the first quarter and then rose in the next quarter, then reversed and fluctuated little, which may be explained by the delay in policy enforcement. The model results also confirm that past inflation plays an important role in determining inflation in Vietnam. Therefore, the government and the State Bank of Vietnam need to maintain the target of inflation control, thus contributing to macroeconomic stability and rational growth support.