Title: Operating the impossible trinity before and after the global financial crisis 2007-2008: evidence in Vietnam

Authors: Thuy Tien Ho; Thu Hoai Ho

Addresses: University of Finance and Marketing, Ho Chi Minh City, 700000, Vietnam ' University of Finance and Marketing, Ho Chi Minh City, 700000, Vietnam

Abstract: This paper focuses on analysing the changes in the impossible trinity administration in Vietnam before and after the global financial crisis 2007-2008. Using the indices representing the impossible trinity, including MI, ERS, and FO, as well as the regression models based on the ARDL method, the authors found that during the study period, the Vietnamese government had selected the exchange rate stability on the list of priorities. The combination with another goal in the impossible trinity, however, changed over two phases. In the period before the crisis, the financial integration was more focused while in the period after the financial crisis, the goal of monetary independence received greater attention. We also discovered that the Vietnamese government was likely to regulate the impossible trinity policies under the intermediary regime that showed the indicators of the impossible trinity with the value approaching 0.5.

Keywords: trilemma; monetary policy; FDI capital; exchange rate.

DOI: 10.1504/IJTGM.2018.092491

International Journal of Trade and Global Markets, 2018 Vol.11 No.1/2, pp.40 - 49

Received: 19 Jun 2017
Accepted: 27 Dec 2017
Published online: 21 Jun 2018 *

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