Preferencje help
Widoczny [Schowaj] Abstrakt
Liczba wyników
2018 | 11 | nr 3 | 191--203
Tytuł artykułu

The Effect of Fiscal Deficit on Economic Growth in an Emerging Economy: Evidence from Vietnam

Treść / Zawartość
Warianty tytułu
Języki publikacji
Fiscal deficit has been sharply increasing in the developing economies worldwide. This paper examines the effect of fiscal deficit on economic growth in Vietnam, the country now is one of the most dynamically emerging countries, but its government has been facing large fiscal deficits for many years by now. Our study has applied the Error Correction model on the quarterly data of 2003-2016. The empirical results strongly indicate there is a cointegration relationship between fiscal deficit and economic growth in Vietnam, in which fiscal deficit had harmful effects on economic growth in both short and long run. In particular, the correlation analysis has confirmed that fiscal deficit can hurt not only the gross output but also private investments, foreign direct investments, and net exports. Our results provide evidence for policymakers, and not only in Vietnam but also in other emerging countries which are in need of urgent solutions so that to reduce the fiscal deficit rate and have more sustainable growth in the future.(original abstract)
Opis fizyczny
  • Open University, Ho Chi Minh City, Vietnam
  • Adams, S. (2009). Foreign Direct investment, domestic investment, and economic growth in Sub-Saharan Africa. Journal of Policy Modeling, 31(6), 939-949.
  • Akayleh, F. A. (2014). Impact of trade openness on economic growth in a small, open, and developing economy: new instrumental variables for trade openness. International Journal of Sustainable Economy, 6(2), 142-170.
  • Ahmad, N. (2013). The Role of Budget Deficit in the Economic Growth of Pakistan. Global Journal of Management and Business Research Economics and Commerce, 13(5), 1-4.
  • Arjomanda, M., Emamib, K., & Salimic, F. (2016). Growth and Productivity; the role of budget deficit in the MENA selected countries. Procedia Economics and Finance, 36, 345-352.
  • Augustt, R. M., Adu, G., & Frimpong, P. B. (2015). The nexus between output fluctuations and fiscal deficits: empirical evidence on Ghana. International Journal of Sustainable Economy, 7(2), 100-117.
  • Basu, P., & Guariglia, A. (2007). Foreign Direct investment, inequality, and growth. Journal of Macroeconomics, 29, 824-839.
  • Biza, R. A., Kapingura, F. M., & Tsegaye, A. (2015). Do budget deficits crowd out private investment? An analysis of the South African economy. International Journal of Economic Policy in Emerging Economies, 8(1), 52-76.
  • Borensztein, E., Gregorio, J., & Lee, J-W. (1998). How does foreign direct investment affect economic growth?. Journal of International Economics, 45, 115-135.
  • Cebula, R. J. (1995). The impact of Federal government budget deficit on economic growth in the United States: An empirical investigation, 1955-1992. International Review of Economics and Finance, 4(3), 245-252.
  • Chotia, V., & Rao, N. V. M. (2017). Examining the impact of public investment and private investment on economic growth: empirical evidence from BRICS nations. International Journal of Economics and Business Research, 14(2), 128-137.
  • Engle, R. F., & Granger, C. W. J. (1987). Co-integration and error correction: Representation, estimation and testing. Econometrica, 55(2), 251-276.
  • Fatima, G., Ahmed, M., & Rehman, W. U. (2012). Consequential effects of budget deficit on economic growth of Pakistan. International Journal of Business and Social Science, 3(7), 203-208.
  • Friedman, M. (1963). Inflation: Causes and Consequences. New York: Asia Publishing House, USA.
  • Johansen, S. (1988). Statistical Analysis of Cointegration Vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254.
  • Kose, A., Ohnsorge, F., & Sugawara, N. (2017). Rising debt and deficits in Emerging Market and Developing Economies (EMDEs) in 5 charts. The World Bank [online] (accessed August, 20, 2017)
  • Ghura, D. (1995). Effects of macroeconomic policies on income growth, inflation, and output growth in Sub-Saharan Africa. Journal of Policy Modeling, 17 (4), 367-395.
  • GSO. (2017). Statistics (National accounts) database. Retrieved from tabid=766 (accessed June, 25, 2017)
  • Hassan, M., Nassar, R., & Liu, C. (2014). Effect of Government deficit spending on the GDP in the United States. Journal of Economic and Economic Education Research, 15(3), 103-112.
  • Karras, G. (1994). Macroeconomic effects of budget deficits: further international evidence. Journal of International Money and Finance, 13(2), 190-210.
  • Kameda, K. (2014). 'Budget deficits, government debt, and long-term interest rates in Japan. Journal of the Japanese and International Economies, 32, 105-124.
  • McGregor, H. (2011). Jim O'Neill Game Changer. Brunswick Review, 4, 27-29.
  • Navaratnam, R., & Mayandy, K. (2016). Causal nexus between fiscal deficit and economic growth: Empirical evidence from South Asia. International Journal of Innovation Education and Research, 4(8), 1-19.
  • MOF. (2017). Statistics database. Retrieved from (accessed July, 16, 2017)
  • Pelagidis, T., & Desli, E. (2014). Deficits, growth, and the current slowdown: what role for fiscal policy?. Journal of Post Keynesian Economics, 26(3), 461-469.
  • Phillips, P. C. B., & Perron, P. (1988). Testing for a Unit Root in Time Series Regression. Biometrika, 75(2), 335-346.
  • Rahman, N. H. A. (2012). The relationship between Budget deficit and Economic growth from Malaysia's perspective: An ARDL Approach, International Conference on Economics. Business innovation IPEDR, 38, 54-58.
  • Sowa, N. K. (1994). Fiscal deficits, output growth and inflation targets in Ghana. World Development, 22(8), 1105-1117.
  • Stock, J. H., & Watson, M. W. (1988). Testing for common trends. Journal of the American Statistical Association, 83, 1097-1107.
  • Van, V. B., & Sudhipongpracha, T. (2015). Exploring Government budget deficit and Economic growth: Evidence from Vietnam's economic miracle. Asian Affairs: An American Review, 42, 127-148. doi.
  • Velnampy, T., & Achchuthan, S. (2013). Fiscal deficit and Economic growth: A study in Sri Lankan economic perspective. Developing Country Studies, 3(3), 166-174.
  • World Bank. (2017). World Development Indicators. Retrieved from (accessed July, 26, 2017).
Typ dokumentu
Identyfikator YADDA

Zgłoszenie zostało wysłane

Zgłoszenie zostało wysłane

Musisz być zalogowany aby pisać komentarze.
JavaScript jest wyłączony w Twojej przeglądarce internetowej. Włącz go, a następnie odśwież stronę, aby móc w pełni z niej korzystać.