DSGE policy tool adapted by Bangko Sentral yields biased insights 340.0
DSGE is the newest type of policy analysis tool adapted by the Bangko Sentral(BSP). It complements the existing set of econometric models it uses as aids in policy making, particularly inflation targeting. Its quite-a-mouthful and technical long name is Dynamic Stochastic General Equilibrium. As with the Corden and Neary framework that BSP analysts used in [...]
Dutch disease raised real exchange rate and caused deindustrialization 339.0
Our leading policy technocrats are near the leading edge in taking up innovative policy analysis tools for the economy – to analyze for possible Dutch disease and for a small model that accounts for the Lucas critique. I discovered two gems from the Bangko Sentral ng Pilipinas (BSP) policy group while researching for my previous [...]
Technocrats quietly fortify institutions as Filipino politicos bicker 338.0
Technocrats have been asked to temporarily govern Greece and Italy as the professional politicians seem fearful of doing the necessary and lose votes. We are fortunate that Filipino technocrats in the economics sphere like Finance, the Bangko Sentral ng Pilipinas (BSP) and Budget and Management are working well with President Aquino even as the political [...]
Libertarianism and the US$ via Eichengreen on Exorbitant Privilege
There is a thoughtful group of Filipinos who believe in Libertarianism. They would very much like for the ideology to be adopted in the Philippines. I have long discussions with some of them on Facebook on its aspects like size and role of government and individual liberty, taxes and a return to the gold standard. [...]
Bangko Sentral Needs More Credibility as Philippines Inflation Fighter 307.0
The Bangko Sentral ng Pilipinas (BSP) will review its forecast of Philippines inflation for the year 2011 on its May 5 Board meeting according to a news report by BusinessWorld Online today. I believe the review becomes necessary because the BSP keeps repeating the classic error of time inconsistency – in behavioral economics – and [...]
Federal Reserve Waves Standard for BSP to Emulate 269.0
With its publication earlier today of the details of what the New York Times reported as “Fed Papers Show Breadth of Emergency Measures” as first released by the Federal Reserve, the Fed proves itself again to be the gold standard among central banks. A Dual and often contradictory Charter. As with the Bangko Sentral ng [...]
High Productivity Allows Growth and Equity at the Same Time 243.0
Paul Krugman, the 2008 winner of the Nobel Memorial Prize for Economics, says that in economies where trade is a small component of GDP as in the Philippines, the main determinant of competitiveness is domestic productivity. And, in my view, addressing development policy via domestic productivity at the industry or firm level, and not with [...]
Amando Tetangco and the Bangko Sentral Innovate on Inflation 235.0
Governor Amando M. Tetangco Jr. and the Bangko Sentral have adapted a great innovation for the Philippines – inflation targeting. I say adapted because inflation targeting is typically applied in industrial nations and not an emerging market like the Philippines. The adaptation is in setting a medium-term target and range to 4% +or- 1% to [...]
Fiscal Challenges to Pres Aquino for a Stable Innovator Peso 230.0
From news reports, the new Aquino Cabinet spent the whole day, yesterday, checking on the veracity of the Arroyo economic statistics suspecting that the numbers to have been embellished to show better than real Arroyo performance. This seemingly unseemly activity from the new administration to the last is necessary to have a solid basis for [...]
Tempests Threaten the Philippines and the Peso in Power Game 217.0
In Q1, the Arroyo administration spent P400 billion from borrowed funds mainly for infrastructure to buy Administration support for the elections. This has resulted into a blip of a growth surge to 7.3% for the quarter but leaves an egg for a huge budget deficit for the incoming Aquino administration for the rest of 2010. [...]
SYNTHESiST Surveys on Philippine Financial Problems 168.0
A screening poll for SYNTHESiST readers to know ourselves more I have created a screening survey below (on 2/2 posted on Sidebar, too.) to know how the group’s choices affect innovation, in the long term. Please choose one answer as honestly as you can. Your choice represents an important part of the collective voice of [...]
Independent Central Bank: The Modern Gold Standard 132.0
The Central Bank of the Philippines struggles for independence An independent central bank is the direct descendant of the gold standard. In fact, it is a very innovative replacement that is fit for our time. The key word here is “independent.” Independence allows central banks to exercise standard monetary policy focused on the value of [...]
