Essays on Vietnam’s financial reforms: Foreign exchange statistics and evidence of long-run equilibrium

Abstract

In this paper, we examine exchange rates in Vietnam's transitional economy. Evidence of long-run equilibrium are established in most cases through a single co- integrating vector among endogenous variables that determine the real exchange rates. This supports relative PPP in which ECT of the system can be combined linearly into a stationary process, reducing deviation from PPP in the long run.