A SHORTRUN MACROECONOMIC MODEL FOR THE ECONOMY OF SOUTH VIETNAM
INSTITUTE FOR DEFENSE ANALYSES ALEXANDRIA VA PROGRAM ANALYSIS DIV
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The study sets forth a method for analyzing the shortrun economic impact on the economy of South Vietnam of possible alternative changes in economic policy of either the government of South Vietnam GVN or the United States. Initially, the study was concerned with the change in the general level of prices that could be expected from a reduction of US forces in Vietnam. However, to trace step by step the consequences of some given change, it is necessary to establish the causal sequence or, in economic language, to build a model making explicit all necessary behavioral relationships and assumptions. As a result the model is sufficiently general to answer a number of questions pertaining to a wide range of policy choices. For example, it can be used to predict the aggregate price effect of changes in 1 US force levels, 2 US-GVN commercial import CIP arrangements, 3 GVN financed import program, 4 GVN expenditures, and 5 Vietnamese consumption and investment patterns.
- Economics and Cost Analysis