The Interaction Between Macroprudential Policy, Monetary Policy, and The Macroeconomy in Vietnam
DOI:
https://doi.org/10.22452/JIE.vol18no3.5Keywords:
Macroprudential policy, Macroeconomic variables, Monetary policy, Global financial crisis, Financial stabilityAbstract
This paper investigates the interaction between macroprudential policy,
monetary policy, and the macroeconomy in Vietnam from 2012 to 2021. We focus on
comparing the effect of macroprudential policy with those of monetary policy in Vietnam.
A Bayesian VAR model is employed to analyse the interaction between macroprudential
policy, monetary policy, and several other macroeconomic variables. This paper confirms
some known results on the interaction between macroprudential policy, monetary
policy, and the macroeconomy. Firstly, macroprudential policy has a substantial
positive effect on the consumer price index. Additionally, it has a slight positive effect
on industrial production, similar to the effect of monetary policy but in the opposite
direction. Conversely, macroprudential policy is also affected by the impacts of shocks
to outstanding credit to the economy and industrial production. Secondly, this paper
shows little interaction between these two policies. Lastly, we offer recommendations for
the application of macroprudential and monetary policies to stabilise the macroeconomy
in Vietnam.
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