Aggregate Demand, Aggregate Supply and Economic Growth of Vietnam: Theory and evidence on an econometric analysis

This paper examines the determinants of economic growth of Vietnam focusing on an aggregate demand and aggregate supply with an econometric analysis. According to the regression and scenario simulation analysis, we can see that although the Vietnamese economy has achieved steady growth since Doi Moi, the supply-side is still too weak to meet the demand-side increases, which results in the macro imbalances including trade deficit and inflation as experienced in 2007-08. FDI inflows have played a significant role to strengthen the supply-side economy so that the Vietnamese government needs to improve her environments to attract foreign capital inflows for sustainable growth.