Section II provides an overview of inflation developments in Vietnam in the years following
the doi moi reforms. This is followed by a brief review of the existing empirical literature on
inflation in Vietnam in Section III. Section IV presents a very simple theoretical model of
inflation, and Section V presents and discusses the empirical results obtained from an
econometric analysis of the data. The empirical analysis seeks to answer two key questions:
(i) what are the key drivers of inflation in Vietnam, and what role does monetary policy play?
and (ii) why has inflation in Vietnam been persistently higher than in most other emerging
market economies in the region? The final section presents the conclusions and discusses the
policy implications of the empirical analysis presented in this paper