Inflation spikes in Vietnam lead to increased economic uncertainty and instability.
The study looked at how inflation and uncertainty about inflation are related in Vietnam from 1995 to 2010. Different models were used to measure inflation uncertainty, with one model found to be the best. The researchers found that positive inflation shocks lead to more uncertainty about inflation, and vice versa. They also found that higher inflation leads to more uncertainty, supporting a well-known hypothesis. Lastly, they discovered that increased uncertainty about inflation leads to higher inflation, confirming another hypothesis.