Open AccessThe Relationship Between External Debt, Economic Growth, Unemployment and National Expenditure in Viet Nam
Author(s) -
Anh Tru Nguyen
Publication year - 2018
Publication title -
journal of economics and management sciences
Language(s) - English
Resource type - Journals
eISSN - 2576-3016
pISSN - 2576-3008
DOI - 10.30560/jems.v1n2p129
Subject(s) - unemployment , economics , debt , external debt , monetary economics , boom , real gross domestic product , fiscal policy , debt to gdp ratio , macroeconomics , environmental engineering , engineering
The article examines the relationship between external debt, economic growth, unemployment and national expenditure in Viet Nam between 1987 and 2016. We found that the influence of a variable on other variables varies in the short run. We found that there are directional relationships between GDP and external debt and GDP and national expenditure. We also found that there are directional relationships between unemployment and external debt, GDP, and national expenditure. Results addressed directional relationships between national expenditure and external debt and GDP. There are two co-integrations among variables. In order to sustain macroeconomic stability in Viet Nam, fiscal policy should be re-examined to meet large development needs and monetary policy should be tightened to reduce credit growth. Specifically, external debt should be effectively managed by the government because an increase in external debt leads to a decrease in GDP and a growth of unemployment. Moreover, GDP should be facilitated to reduce unemployment in the economy. Lastly, unemployment needs to be controlled because it generates a boom of national expenditure and vice versa.