Relationship between budget deficit and economic growth in Viet Nam

Abstract

This paper examines the relationship between budget deficit and economic growth in Vietnam, using VAR model. The results indicate that the relationship between budget deficit and economic growth is not clear. However, gross investment has a causal relationship with budget deficit and economic growth. The government should, therefore, implement and control the investment flows as well as effectively manage budget deficit in order to achieve a stable growth in the coming years.