Advances and Applications in Statistics
Volume 56, Issue 2, Pages 125 - 142
(June 2019) http://dx.doi.org/10.17654/AS056020125 |
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ANALYSED MONEY SUPPLY AND INFLATION: EVIDENCE FROM VIETNAM ECONOMY
Doan Van Dinh
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Abstract: The inflation and its impact on each country’s economic growth are concerned by countries. The economists define that the inflation is a phenomenon of currency and currency has caused the inflation in some countries by their monetary policies. The object of the paper is to analyse the inflation and assess government’s adequate money supply growth. The methodology is application of the ordinary least squares (OLS) model, and Vietnam’s applied data are collected in the time series from 2000 to 2017. This data is also to evaluate the relationship between money supply and inflation. The results show that in case the money supply growth does not cause inflation in a short-term, but it causes inflation in the long-term when the money supply grows continually. It evidenced that the money supply and inflation are related to each other and the money supply directly impacts on economic growth. Therefore, the government should have the relevant monetary policy to grow economy and proposals to make monetary policy so as to control the inflation levels and stimulate the economic growth. |
Keywords and phrases: economic growth, inflation, money supply, money velocity.
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