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 [...]
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 [...]
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 [...]
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 [...]
Crisis as Opportunity Gives More Power to the Strong 2 of 3
(Start of Part 2 of 3. From Post #64) Today, the European Chamber echoed my post on Monday, June 2 (See Post #64). The financial crisis presents opportunities from changing conditions that level the playing field to investors. Indeed, the government ought to take advantage of the crisis to initiate needed reforms to better position [...]
Support the Bangko Sentral for a Stable Peso 3 of 3
Let us support the Bangko Sentral ng Pilipinas as a central bank that provides the price anchor, the present-day gold standard, for our economy. Through real independence from political overlords, the price anchor provides long-term benefits: A stable price of money discourages speculation. Success in investing will now require merit in product differentiation and business [...]
Is the Bangko Sentral in Trouble? 2 of 3
What can the people do if the government itself violates the law? Not much especially if no harm is felt. And even if the violation ultimately leads to a bust that hurts the people, much less so, it seems. The violation of the law I am speaking about is the successive administrations’ neglect in funding [...]
