Abstract
We investigate the growth experience of Vietnam, the country which has been getting
recent attention as being the next emerging giant. First, we present an aggregate
level investigation of Vietnam's economic growth experience, since the inauguration of
reform in 1986 known as Doi Moi. We focus on a top-down approach that performs
growth and level accounting exercises. These decompositions o er the possibility to
track the economic progress of Vietnam and to formulate policy accordingly depending
on where the gaps originate from. Second, we build a two-sector general equilibrium
model, investigating the secular decline in agricultural employment. Despite the notable
structural changes over the past thirty years, agriculture still has a substantial
weight in the Vietnamese economy. We conduct a quantitative analysis using a theoretical
framework, with an emphasis on the counterfactual outcomes of inheriting Chinese
sectoral productivity growth rates, where China is recognized as the paragon emerging
economy. The main ndings are: (i) Vietnam has grown impressively since 1986, but is
still a relatively poor country in absolute terms; (ii) Vietnam must decrease its reliance
on factor accumulation as its source of growth and increase its technological capabilities;
(iii) economic policies should equally target both agricultural and nonagricultural
sectors to increase sectoral productivity growth rates in Vietnam.