Lecture Development policy: Financing development includes content: savings and investment, finance in the real world, financial repression, increasing the supply of longterm finance, reducing speculation,... We invite you to refer to the lecture Đề tài Hoàn thiện công tác quản trị nhân sự tại Công ty TNHH Mộc Khải Tuyên được nghiên cứu nhằm giúp công ty TNHH Mộc Khải Tuyên làm rõ được thực trạng công tác quản trị nhân sự trong công ty như thế nào từ đó đề ra các giải pháp giúp công ty hoàn thiện công tác quản trị nhân sự tốt hơn trong thời gian tới.
cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z FULBRIGHT SCHOOL OF PUBLIC POLICY AND MANAGEMENT 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy Financing development g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 Development Policy Summer 2023 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv Why is the market for credit different from goods markets? 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq Goods markets are spot markets: It is easy to know what you are getting by just looking at it, and the transaction is completed immediately • The price of goods reflects supply and demand at any given time If the price is too high, you can go to another market and get goods of a similar quality • Credit is a promise to repay money at a future date But future is unknown • So credit is always rationed The market never clears • There is always more demand for credit than bankers are willing to supply • Lenders ration credit based on information that they have about borrowers • p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Savings and Investment: The Conventional Story 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq • Say’s Law: Supply is always equal to demand (the economy always operates at full employment) xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 • If Say’s Law is true, then savings always equals investment pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 • Households earn income and save part of it in banks • Banks then loan these savings to businesses for investment • The equilibrium of savings and investment is at the real interest rate • The stock of savings is “loanable funds” np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv Finance in the real world 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj • ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np Banks not lend money already in their vaults Banks create money (deposits) when they make loans • Investors borrow money and pay wages, some of which is saved • Investment that generates savings, not the other way round • The real interest rate is set by the central bank It is not an equilibrium rate The stock of loanable funds is not a limiting factor on financing • Financing is limited mostly by demand: The availability of viable, profitable projects • Banks also need to be able to cover their immediate obligations (pay depositors when they want to withdraw their money) • pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Conventional thinking: “Secular stagnation” 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 8,0% 3n 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 6,0% pe 8g 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 2010s 2000s 1990s 79 gt rf 2u ka 86 n5 z6 1z p1 wl 6z 2k ku 1980s oc fl 63 c6 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y -2,0% qo 0,0% 1970s ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a US Corporate fixed investment, average annual growth (Source: OECD) • But the problem is not savings: its not enough investment demand 2,0% • So real interest rates will stay at historic lows 10,0% • There is a surplus of savings because the population in Europe, North America and Japan is getting older and saves too much 4,0% • New technologies are so efficient that less investment is needed 12,0% gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 xx v 7ư m er nb w3 xf s w1 lja 5x 54 7jz cj oư hw 22 qư 1n 12% 40% ư0 xq fy2 m rf4 ws eo 80 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj 35% a6 ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 i7 qj 4f 8% 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 25% 9w w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 6% 6p u0 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn 1993 ưh cq 1991 2b on 1989 0ư s g3 ytd 1987 ci h6 1985 9z bp 1983 5p z kg 1j6 1981 u tlt 1979 6a 1977 ji dk 66 1975 f9 c7 1973 27 r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly 1971 ae 1969 zc 0% 0% 1967 ưz 1965 tj1 2% 5% aq ti 4ư ưv bk rh x ưp ikg • Main constraint on Korea was not savings, but foreign exchange (access to dollars to buy machines and inputs) and demand 10% 4% 15% 10% 30% 20% • Government directed credit to export industries to take advantage of foreign demand 14% 45% • Savings in Korea was the result of rising investment, not its cause 1963 cy fj vw wt Korea as a developing country: Low savings and investment 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl Gross domestic savings (% GDP) 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 Gross capital formation (% GDP) zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea GDP growth (%) jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw “Financial repression”: McKinnon and Shaw yv h5 t3 jb 22 bs n0 yi sv 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp • Government controls on credit and interest rates results in “financial repression” and reduces the supply of savings for development bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap • The debt crisis of the 1980s gave the IMF and World Bank leverage to insist on financial liberalization as part of “structural adjustment programs” especially in Latin America er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za • Privatization of state-owned commercial banks including FDI in banking sector oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 • Deregulation of domestic banking, including creation of new instruments and products (increasing systemic risk) 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er 45% nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m 40% ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 30% sd oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u 5% 25% ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam 55% 45% 35% 25% 15% 5% Gross domestic savings (% GDP) 0% -5% -5% ap 10% Viet Nam 2010-19 9z 15% Viet Nam 2000-09 20% Viet Nam 1990-99 35% • Experiments attempted across the developing world • Savings and investment rates did not rise • The real interest rate had no affect on savings • Rapid increase in financial crises because too many banks allowed to open, and they lent too much money • Culminating in East Asian Financial Crisis of 1998 Real interest rate cy fj vw wt Financial liberalization, 1980-2009 ưg n2 lb 5k lx vv 1t c2 cr zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 14% v 7ư m er 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 12% b1 1m yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv yh bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj ux t 2c jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 -4% llb -6% i1 0m -2% 44 -4% bt 4x 2011 ưh cq 2009 2b on 2007 0ư s g3 ytd 2005 ci h6 2003 9z bp 2001 5p z kg 1j6 1999 u tlt 1997 6a 1995 ji dk 66 1993 f9 c7 1991 27 2% 1989 ae 0% 1987 zc 4% ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd Thailand Indonesia tu 88 0i c4 xo zx xt t3 Mexico Argentina 0% -2% 6% 4% 8% 6% 10% 8% 1985 ưz 10% 1983 tj1 2% 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 cy fj vw wt Financial crises and growth in Asia and Latin America gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Financial liberalization failed to raise the rate of growth 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 px zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq w2 xv ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 3% y4 15% ah 4% q5 20% b1 5% 1m 25% j3 ef 6% i2 30% z6 jjx 7% • Growth slowed after financial liberalization and investment did not increase until after 2000 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi zw f5 b7 ze ưh 34 43 bj 2% 2w 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb 1% jg f5 a1 0h 5% 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 0% ưp qo 0% ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 GDP growth np pu m jm cz fm t1 y0 0f ar Investment/GDP qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx • But the rise in investment and growth was related to relocation of manufacturing to Asia, not financial liberalization 35% 10% • Periodic financial crises reduced average growth rates in the developing world Investment/GDP and GDP growth in Low and Middle Income Countries xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 10 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt East Asian Financial Crisis 1998 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 55 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 11.000 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx 50 j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr 9.000 ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb d4 kj 7x jg u0 9z 40 jk ưo 5.000 k9 45 sa 7.000 yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v 35 3.000 p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd 1.000 pq za jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 30 oe rc 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 (1.000) sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y 20 (5.000) 25 (3.000) ug rw wg rq 2z kl 0a r0 0h yb USD/THB q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar Current account (USDm) Credit (THBb) qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju • Large capital inflows into non-tradeable sector in Southeast Asian economies: Borrowing dollars and yen to invest in property (currency mismatch) • Easy access to foreign borrowing reduced credit quality: As asset prices rise, companies have more collateral and can borrow more • Capital inflows led to currency overvaluation and trade deficits • When Japan tightened domestic credit, the carry trade reversed • Loss of confidence led to depreciation of domestic currencies and bankruptcies as local banks and corporations could not pay back foreign loans with cheaper baht, Rupiah, won y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 11 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt What is the proper role of finance? 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 • To “render long-term financing commitments sufficiently liquid to validate the commitment of resources to long term uses without requiring individual investors to make long-term financing commitments” (Jan Kregel 2014) 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd • Banks have mostly short-term liabilities (deposits) so they not want to make long term loans • Financial markets (secondary markets) help them make long-term obligations liquid: for example, securitization of mortgages, secondary bond markets, stock markets pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 • But most developing countries not have liquid secondary markets, so there is shortage of long-term financing 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 • Even in advanced countries, governments intervene to create liquid secondary markets xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 12 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Increasing the supply of long-term finance 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za • Development banking (BDNES in Brazil, KfW in Germany, Korean Development Bank) • 250 NDBs now operating, $5 trillion in investment • Second tier lending, loan guarantees • Syndicated loans, PPP loans with technical assistance • Benefit: counter-cyclical lending during the Global Financial Crisis oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv • Fannie Mae and Freddie Mac in the US: Securitization of mortgages 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly • Small Business Administration in the US: Loans and equity for small businesses aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm • Sovereign Wealth Funds t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 13 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv Reducing speculation 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib Channeling finance to productive projects (and away from speculative ones) is also important • For example, 2008 capital inflows in Vietnam sparked asset bubble and overlending by banks • Led to inflation, massive current account deficit • Government had to step in to raise interest rates and cap lending Discouraging speculation can help • Property and capital gains taxes • Strict limits on borrowing for speculative purposes (loan to asset ratios) • 97 y1 • hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 14 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Boom and bust in Vietnam 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 6e ee sv sy g5 r0 sg c6 aq -4% fy2 26% 21% 16% 11% 6% 1% q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z -9% p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z -14% kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk Current account deficit/surplus Fiscal deficit/surplus Net household and corporate lending Private capital inflows 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 15 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv Policy implications 5w xt 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 • The conventional approach (Say’s Law) sees savings as a constraint on investment zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 • Frugal households and governments solve the financing problem by generating domestic savings • But if supply does not always equal demand, frugal households just leads to unemployment and lower profits, which reduces savings p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv • The main constraint on savings in investment: if businesses expect profits they invest, thereby generating savings • Most countries are constrained not by savings, but by long-term investment because financial markets and not liquid bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp • Banks and other investors will not extend credit if they cannot easily convert assets into cash • National Development Banks and other instruments can increase the supply of longterm finance jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl j11 um b7 fcw bư 6x 46 43 uj t s1 tif 16 © Fulbright University Vietnam • Reducing speculation also important to maintain macroeconomic balance ưg n2 lb 5k lx vv 1t c2 cr cy fj vw wt tj1 ưz zc ae 27 f9 c7 ji dk 66 6a u tlt 5p z kg 1j6 9z bp ci h6 0ư s g3 ytd 2b on ưh cq zs jk as 3b 2b th ud 54 lư ư4 dh 4p ưx 75 3y 8g klq 8w pk ps h2 sx k3 q5 u7 f2 m um nf 8v ec jjo ej xh w7 n9 40 2c g2 8x 2o xd iq id cl 8h jw yv h5 t3 jb 22 bs n0 yi sv 5w xt Discussion questions 62 xv j7s p ưu lm jp o3 gs t 40 lau jrn cj 3g x8 7z 19 55 2w qr rx 4g bg 3f t 2w jvo z5 ay 1b sd c5 ư0 xq fy2 xx v 7ư m er nb w3 xf s w1 lja 5x 54 cj oư 7jz hw 22 qư 1n m rf4 ws eo 80 a6 i2 z6 jjx j3 ef b1 1m ah q5 px y4 zq x 89 itj ok qp bc nr ư9 g2 yw d1 l9 qq Why credit markets behave differently from markets for normal goods and services? xv w2 ry 3n jw 61 6g sh k9 sa jk ưo 3d nl h 4h m 4s 73 3p a7 9w i7 qj 4f 9w sd 7s yg gq ht 3a gh d5 78 wx aq x8 x4 w6 62 oy 47 pe 8g rf tx 9p go ưt an ds 2h 6p u0 df lb kj d4 7x jg u0 9z yl wq h0 ư1 h5 or 13 j ku m ư8 qn un xv tb What are the main lessons from the East Asian financial crisis that are relevant to current conditions? ig k2 ax il h5 b1 ol fw 4m ap er e9 vd of ưq d0 p 4ja 89 f ye zl2 b3 tm ưy 2v p zig wi 2w zw f5 b7 ze ưh 34 43 bj 23 zv bt 4x yh 44 bk dj ay yd pq za oe rc jh rt p3 p2 uw ưj i1 0m ux t 2c llb jg f5 a1 0h 8b wư ah e 3o 7lư 40 z6 6e ee sv sy g5 r0 sg c6 aq q8 na pv 1ư w0 ưp qo ot xn r7 4c 2r rc 84 ze n3 ak cr e6 9s s1 oc fl 63 c6 79 gt rf 2u ka 86 z6 n5 1z p1 wl 6z 2k ku 1r s0 oly aq ti 4ư ưv bk rh x ưp ikg 3o cr sb ib 97 y1 hh kp l3 1y ug rw wg rq 2z kl 0a r0 0h yb q2 w7 ci8 np pu m jm cz fm t1 y0 0f ar qo qe ef 31 ax 23 zb 7v 35 cn du k0 xk ju y7 co 61 sw fk vd tu 88 0i c4 xo zx xt t3 gk 1w 9e ea jeq p tn o9 gz 34 iư o9 l0a gd o1 3q y iw m rz q lln yf fe ie 0w ljy br eu db j s7 ty3 ip z0 bo pư z0 hp jj jjld 1h ad ne n1 ru 1d ug er p3 r3 9w km g2 zw 9b 41 1d x2 wl um b7 fcw j11 bư 6x 46 43 uj t s1 tif 17 © Fulbright University Vietnam ưg n2 lb 5k lx vv 1t c2 cr