I. Economic Development Overview
1. Economic theory applies:
Economic models
Economic modeling is at the heart of economic theory. Modeling provides a logical, abstract template to help organize the analyst's thoughts. The model helps the economist logically isolate and sort out complicated chains of cause and effect and influence between the numerous interacting elements in an economy. There are some primary applied economic models in the world, also in Viet Nam.
1.1. Aggregate Supply - Aggregate Demand (AS.AD) Model:
The AD-AS or Aggregate Demand-Aggregate Supply model is a macroeconomic model that explains price level and output through the relationship of aggregate demand and aggregate supply. It is one of the primary simplified representations in the modern field of macroeconomics.
Aggregate demand is the demand of all products in an economy - OR the relationship between the Price Level and the level of aggregate output (real GDP) demanded.
Aggregate Supply is the supply of all products in an economy - OR the relationship between the Price Level and the level of aggregate output (real GDP) supplied.
1.2. Loanable Funds Model:
Model of interest rate determination
Explore the causes of rising and falling interest rates
Evaluate the wisdom of policy measures designed to influence credit and monetary growth rates and interest rates
Can be represented as National Savings = Domestic Investment + Net Foreign Investment.
2. Economic Development from history up to date:
Economy of Vietnam developing planned economy and market economy
Since the mid-1980s, VN has made a shift from a highly-centralized planned economy to a socialist-oriented market economy
Nowadays, Vietnam is in the period of integrating into the world's economy, as a part of globalization
As a leading agricultural exporter and an attractive foreign investment destination in Southeast Asia
HISTORY
2.1. Pre-Colonial Vietnam
Agriculture was always the foundation of the country.
Became the cradle of forest products, either as a commodity or tribute.
Domestic and international exchange was undeniably significant in tradition.
Trade and markets operated freely under the laws and became the source of tax.
In the seventeenth century, European merchants came.
2.2. Colonial Period
Began in 1884, France was responsible for economic policy and finance.
The South was designated to be developed agriculturally
The North was selected as the region in which industrial development was to be concentrated.
The separation distorted the basic Vietnamese economy by overly stressing regional economic differences.
The colonial government also developed some extractive industries
2.3. 1954-1975
- By the end of 1966, serious strains developed in the North's economy as a result of war conditions
