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International Conference of the Thailand Econometrics Society

TES 2019: Structural Changes and their Econometric Modeling pp 275–288Cite as

The Interaction Between Fiscal Policy, Macroprudential Policy and Financial Stability in Vietnam-An Application of Structural Equation Modeling

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Abstract

This paper studies the impacts of fiscal policy, macroprudential policy as well as their interaction on financial stability in Vietnam during the global economic crisis 2008–2009. Using Structural Equation Modeling (SEM), the study shows that both fiscal policy and macroprudential policy have a great impact on the financial stability. In particular, fiscal policy has a negative impact while macroprudential policy shows a positive effect on the financial stability in Vietnam. Besides, evidences that indicate a negative relation between the fiscal policy and macroprudential policy in Vietnam are also implied in the study’s outcomes. With those results, the authors come to conclusion that Vietnam should execute macroeconomic policies, especially the fiscal policy and macroprudential policy, with caution and consideration of their interaction in order to take the best advantage of their coordination towards financial stability.

Keywords

  • Financial stability
  • Structural equation modeling
  • Fiscal policy
  • Macroprudential policy

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Source: Authors’ calculation.

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Author information

Authors and Affiliations

  1. International Economics Faculty, Banking University of Ho Chi Minh City, 36 Ton That Dam Street, District 1, HCMC, Vietnam

    Nguyen Ngoc Thach

  2. Banking University of Ho Chi Minh City, 36 Ton That Dam Street, District 1, HCMC, Vietnam

    Tran Thi Kim Oanh

  3. University of Economics and Law, Vietnam National University - HCMC, Quarter 3, Linh Xuan Ward, Thu Duc District, Ho Chi Minh City, Vietnam

    Huynh Ngoc Chuong

Authors
  1. Nguyen Ngoc Thach
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  2. Tran Thi Kim Oanh
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  3. Huynh Ngoc Chuong
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Corresponding author

Correspondence to Nguyen Ngoc Thach .

Editor information

Editors and Affiliations

  1. Department of Computer Science, University of Texas at El Paso, El Paso, TX, USA

    Vladik Kreinovich

  2. Faculty of Economics, Chiang Mai University, Chiang Mai, Thailand

    Songsak Sriboonchitta

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Thach, N.N., Oanh, T.T.K., Chuong, H.N. (2019). The Interaction Between Fiscal Policy, Macroprudential Policy and Financial Stability in Vietnam-An Application of Structural Equation Modeling. In: Kreinovich, V., Sriboonchitta, S. (eds) Structural Changes and their Econometric Modeling. TES 2019. Studies in Computational Intelligence, vol 808. Springer, Cham. https://doi.org/10.1007/978-3-030-04263-9_21

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