Government spending boosts household consumption in Vietnam, driving economic growth.
The article explores how government spending affects Vietnam's economy, focusing on variables like GDP and household consumption. By using two models, the researchers found that an increase in government spending leads to a rise in output, but the impact on consumption varies. The Dynamic Stochastic General Equilibrium model suggests that household consumption increases after government spending, especially for Non-Ricardian households. This differs from the Real Business Cycle model, where government spending typically decreases household consumption.