Simulation of the impacts of a depreciation of the exchange rate on Vietnamese economy: A computable general equilibrium model

Abstract

Vietnam Dong has been continuously depreciating in recent years, The State Bank of Vietnam has attempted to contol the exchange rate for macroeconomic stability, especially reducing inflation rate as a target of Vietnamese economy. This study built the computable general equilibrium model for Vietnamese economy in order to estimate the impact of a depreciation of the exchange rate on macroeconomic indicators. The result of this study provides useful information for Vietnamese policy-makers to make decisions on the exchange rate policies. The 17% depreciation of the exchange rate will have positive impacts on Vietnamese economy in terms of growth rate (4.58%), employment rate (4.22%) and exports (15.49%); but the cost for that is 13.58% inflation. Thus, the trade-offs among macroeocnomic indicators as application of the exchange rate policy must be considered.

Keywords

• tỷ giá đối đoái
• kinh tế vĩ mô việt nam
• mô hình cân bẳng toàn phần
• mô phỏng