The Role of Inflation in Shaping Vietnam’s Economic Growth - A New Perspective from the DYNARDL Model

This study investigates the effects of inflation on Vietnam’s economic growth in a comprehensive manner. We employ the dynamic simulations of the autoregressive distributed lag (DYNARDL) model to analyze the dataset covering the period from 2007 to 2024. The results from the DYNARDL model indicate that inflation promotes economic growth in Vietnam in the long run, but its short-term impact is insignificant. The findings of this study are relevant for policymakers and academics, as they provide evidence in support of prior empirical studies that failed to establish a clear relationship between inflation and economic growth. Furthermore, the findings serve as a counterpoint to studies that found a negative impact, particularly in the Vietnamese context. Therefore, these results may assist policymakers in formulating and managing effective macroeconomic strategies.