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Using the interest rate tool to control inflation in Vietnam

This article discusses the use of the interest rate tool in controlling inflation in Vietnam - based on the successful lessons and the limitations of this tool. | VNU. JOURNAL OF SCIENCE, ECONOMICS-LAW, N01E, 2004 U SIN G THE IN TER EST RATE TOOL TO CONTROL INFLATION IN VIETNAM V u T h i D a u (* Inflation is considered as a phenomenon Form ula (2) shows th a t when the associating w ith the m a rk e t economy, so in estim ate d inflation r a te increases, it wil modern economic circumstances, controlling make inflation is one of the essential ta rg e ts of reflecting th e decrease in the real costs 01 each in te re sts of the people participating the nation. However, how to control th e real in te re st credit from different causes and occurs in different borrowing money, b u t dam ages lending economic Therefore, social circum stances in which the is decrease inflation is not easy as inflation results an d m arket, rate beneficial d e m an d s money different in te re st ra te tools in controlling borrowm g money decreases, the interest inflation to gain various goals. This article ra te grows. The increase in the estim ated discusses the use of the in te re st ra te tool inflation r a te will re s u lt in the increase in in controlling inflation in V ietnam - based in te re st rate, which is th e effect cited bv on the economist, F ish e r an d is called Fisher successful lessons and the but th e borrowing different nations, which m akes use of the the increases, for for supply O- •effect. This effect implies th a t if you fight lim itations of this tool. ag ain st inflation by lowering in terest ra tf, 1. The B asis o f C on trollin g Inflation by In terest Rate W ith reg ard to th e it is c ertain t h a t you will fail: the inflation will increase. relationship Economists studied an d illustrated the betw een in te re st ra te a nd inflation, there relationship betw een inflation ra te and have been m any research works and a in te re st sh a re d admission is th a t they are closely countries including Italy, France, C anada, related. The