Impacts of International Oil Price Changes on Vietnam’s Economy - An Input-Output Study

Abstract

In this paper we investigate the impacts of international oil price changes on Vietnam’s economy by using an input-output analysis. The goals of our study are: 1. establishing a price sub-model and output sub-model in the input-output analysis framework; 2. analyzing impacts on both price and output sectors. The result shows that impact in the long run is much higher than in the short run. While the 10% increase in petroleum prices experiences negative results, the 5% increase in prices shows a positive effect, implying that a small change in oil prices may enjoy resource reallocation efficiency. In the short run the manufacturing sector will suffer if electricity and public utility prices reflect a 10% increase in oil prices.