Impact of government budget deficit on the effectiveness of monetary policy in Vietnam

Abstract

The effectiveness of monetary policy is influenced by many factors, in which the budget deficit and the fiscal dominance play an important role, especially for developing countries which require substantial budgetary support for development goals like Vietnam. The article highlights the effects of budget deficis and the fiscal dominance on the effectiveness of monetary policy in Vietnam in the period 2007-2017, then proposing some policy recommendations to eliminate the negative impacts from those factors.