Trade and Income Growth in Vietnam: Estimates from a New Social Accounting Matrix

Tarp, Finn and Roland-Holst, David and Rand, John (2002): Trade and Income Growth in Vietnam: Estimates from a New Social Accounting Matrix. Published in:

Abstract

Economic reforms and greater outward orientation are giving rise to extensive structural change in the Vietnamese economy. Because of the leverage that global markets can exert on an emerging economy, such adjustments will be particularly significant in the composition of domestic supply and demand. As domestic protection levels are reduced and external market access increases, trade growth and shifting trade patterns will have pervasive effects on income distribution in Vietnam. In this paper, we use a newly estimated Vietnam social accounting matrix to elucidate the links between trade and income in the country. With matrix decomposition methods, we show how the Vietnamese economy propagates the direct effects of external demand across the spectrum of domestic activities, factors, and households. This detailed analysis provides a blueprint for policies to improve economic participation of activities and households with relatively weak linkages to the rest of the economy.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade, Income, Growth, Vietnam
• Subjects: P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P24 - National Income, Product, and Expenditure ; Money ; Inflation; A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values; F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies ; Fragmentation

References

Arndt, C., H. T. Jensen, and F. Tarp (2000), "Structural Characteristics of the Mozambican Economy: A SAM Based Analysis," Review of Development Economics, 4(3): 292-306.

Defourny, J. and E. Thorbecke (1986), "Structural path Analysis and Multiplier Decomposition with a Social Accounting Framework," Economic Journal, 94(373): 111-36.

Leontief, W. (1953), Studies in the Structure of the American Economy, Oxford University Press, New York.

Pyatt, Graham (1985), "Commodity Balances and National Accounts: A SAM Perspective," Review of Income and Wealth, 31(2): 155-69.

Pyatt, G., and J.I. Round (1985), Social Accounting Matrices: A Basis for Planning, The World Bank and Oxford University Press, London.

Pyatt, G., and J. I. Round (1979), "Accounting and fixed price multipliers in a social accounting matrix framework," Economic Journal, 89(356): 850-873.

Reinert, K. A. and D. Roland-Holst (1997), "Social Accounting Matrices," in J.F. Francois and K.A. Reinert, eds., Applied Methods for Trade Policy Analysis: A Handbook, Cambridge: Cambridge University Press.

Roland-Holst, D. (1990), "Interindustry Analysis with Social Accounting Methods,"Economic Systems Research, 2(2): 125-45.

Roland-Holst, D., and F. Sancho (1995), "Modeling Prices in a SAM Structure," The Review of Economics and Statistics, 77(2): 361-371.

Round, Jeffrey I. (1985), "Decomposing Multipliers for Economic Systems Involving Regional and World Trade," Economic Journal, 95(378): 383-99.

Stone, R. (1981), Aspects of Economic and Social Modeling, No. 126, Librairie Druz, Geneva.

Tarp, F., J. Rand, and D. Roland-Holst (2001), A 1999 Social Accounting Matrix for Vietnam, CIEM, Hanoi, 80 pp. (forthcoming: The Gioi Publishers, Hanoi).

Tarp, F., and D. Roland-Holst (2001), “Rural-urban Dualism in Vietnam: Prospects for Redistribution Through Economic Reform,” Working Paper, CIEM, Hanoi.