Macroeconomic Experiences of the Transition Economies in Indochina

By Chi D Pham, Ajai Chopra, John R Dodsworth, Hisanobu Shishido

October 1, 1996

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Chi D Pham, Ajai Chopra, John R Dodsworth, and Hisanobu Shishido. Macroeconomic Experiences of the Transition Economies in Indochina, (USA: International Monetary Fund, 1996) accessed June 19, 2025

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines stabilization policies in Vietnam, Cambodia, and Laos since the late 1980s. Compared with other transition economies, the Indochinese countries avoided an output collapse and moved quickly to strong GDP growth and low inflation. Each adopted a similar mix of policies centered on flexible exchange rates, high real interest rates, fiscal adjustment through expenditure cuts, and the imposition of hard budget constraints on public enterprises. In none of the countries was an exchange rate anchor considered feasible, and money-based stabilization proved effective, despite evident instability in the demand for money.

Subject: Commercial banks, Currencies, Currency markets, Exchange rates, Financial institutions, Financial markets, Foreign exchange, Money

Keywords: Budget constraint, Budgetary contribution, Commercial banks, Currencies, Currency markets, Eastern Europe, Enterprise account, Enterprise closure, Enterprise profitability, Exchange rates, Firm, Inflation rate, Nominal exchange rate, Operated company, Public enterprise sector, Run enterprise, State enterprise reform, State enterprise sector, State enterprise transfer, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1996/112
Stock No:

WPIEA1121996
ISBN:

9781451853551
ISSN:

1018-5941

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