USING AN EXPANSION ECONOMETRIC MODEL WITH FIVE FACTORS TO IMPROVE QUALITY OF MEASURING IMPACTS OF PUBLIC DEBT ON MACRO ECONOMIC FACTORS - CASE IN VIETNAM

Pham Minh Dat, Nguyen Van Tuong, Nguyen Thi Phuong Hong, Dinh Tran Ngoc Huy, Pham Tuan Anh

Abstract: Public debt issues are among vital problems of a nation. It has both positive sides and negative aspects which contribues to the development of a nation. National debt is the debt of the State for development investment, it contributes to promoting economic growth and stabilizing macroeconomic factors. Good public debt management is always among main concerns of many nations, esp. developing countries. However, an increase in excessive public debt will hinder economic growth and adversely affect macroeconomic factors. By data collection method published, statistics, analysis, synthesis, comparison, quantittive analysis to generate qualitative comments and discussion; using econometric method to evaluate quantitative results, the article analyzed and evaluated the impacts of public debt on the macroeconomic factors in the period of 2010-2018 of Vietnam, both positive and negative sides. This is one main purpose of this study. This research paper used a regression model with annual data from 2010-2018, and the results of quantitative research, in a five factor model, show that the increase in public debt has a significant effect on reducing GDP growth with the highest impact coefficient, the second is decreasing the exchange rate and trade balance, finally is a slight decrease in market interest rates and slight increase in inflation. Using an expansion econometric model with the support of Eviews, This research findings and recommended policy also can be used as reference in policy for many developing countries including Vietnam.

Keywords: Public debt; GDP growth; Inflationary; Budget deficit; Market interest rate

DOI: 10.24874/IJQR14.03-02

Recieved: 07.03.2020  Accepted: 15.06.2020  UDC: 658.149.5

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