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 [...]
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 [...]
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 [...]
Filipino Taxpayers, Be Ready for a Possible Reserves Grab at the BSP 119.0
Since we cautioned about the depreciating US$ just three weeks ago in our September 18 post, the Philippine peso has strengthened by 3.0% to PhP46.656 (closing rate, 10.8.09). As in October, 2007, this is a danger signal as some sectors like exporters, BPOs and OFWs will start to clamor for support from the rapid rise [...]
New Dangers Lurk as the US Dollar Depreciates 111.0
Three days ago, I heard a guest at Bloomberg call out that the US has become “a source of funds for the carry trade.” Since then, the drop in the value of the US$ and the improbable rise of the peso to PhP 47.70 to US$1 (closing today, 9/18/09) tend to support that claim. If [...]
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 [...]
Innovation and Independence for RBNZ in Central Banking – 2 of 2
(Start of Part II of II) A critical element in NZís inflation targeting is the separation of roles: monetary policy through the central bank takes care of price stability, i.e. inflation, while fiscal policy through the rest of the government takes care of growth and domestic stability.
Singleton Story of Innovation and Independence for the RBNZ – 1 of 2
As the first country in 1988 to adopt a formal inflation target, New Zealand proves that a nation, as one, can be innovative. New Zealanders used to be really rich in the world even as the country had a strong socialist streak with cradle-to-grave entitlements. The problem started in 1958 when they lost their main [...]
