Template-Type: ReDIF-Article 1.0 Author-Name: Jose Encarnacion Jr. Author-Workplace-Name: School of Economics, University of the Philippines, Diliman Title: Instability of Equilibrium Growth Abstract: If the solution to a dynamic optimization problem is interpreted as an equilibrium growth path, then the Harrod instability proposition applies not only to the neoclassical growth model but also to the more recent endogenous growth version. Journal: Philippine Review of Economics Pages: 175-183 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/62/723 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:175-183 Template-Type: ReDIF-Article 1.0 Author-Name: Michael M. Alba Author-Workplace-Name: School of Economics, University of the Philippines, Diliman Title: Measuring the Effects of Schooling on Wages for a Young Sample from Rural Guatemala Abstract: In order to measure the intrinsic effect of schooling on wages for adolescents and young adults from four villages in Rural Guatemala, this paper estimates different wage speci?cations that have been suggested in the human capital literature. Successively accounted for are potential sources of bias in the estimated coef?cient of schooling, such as those arising from self-selectivity in the wage-earning sample and from the omission of innate ability, family background and the quality of schooling from the set of wage determinants. The results show that when these potential sources of bias are treated, the rate of return to schooling (inclusive its cognitive and noncognitive aspects) is about 5.9 percent for the population of adolescents and young adults in these villages. Journal: Philippine Review of Economics Pages: 184-231 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/109/731 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:184-231 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos C. Bautista Author-Workplace-Name: UP College of Business Administration, Diliman Title: Testing a Forecast Rationality in Financial Markets: The Case of the Philippines Abstract: The study examines a segment of the Philippine financial system within the efficient market framework. The period under study is broken down into three periods and tests for forecast rationality using a nonlinear least squares procedure were conducted. The main result of this study is not at all surprising. Philippine financial markets are in general efficient in conveying information except during the crisis period. The results may be explained by the fact that the crisis generated noise not normally present in non-crisis periods. This has a temporary effect of confusing market participants who are unable to distinguish market movements from the noise emanating from the uncertainties of the period and thus contaminating information sets. This leads to a rejection of the maintained hypothesis of rationality in the crisis period. Journal: Philippine Review of Economics Pages: 232-252 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/110/727 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:232-252 Template-Type: ReDIF-Article 1.0 Author-Name: Renato E. Reside Jr. Author-Workplace-Name: University of the Philippines School of Economics, Diliman Author-Name: Parantap Basu Title: Inflation, Growth and Policy Coordination Abstract: The effect of monetary policy on output growth and inflation is examined in a monetary endogenous growth model with an explicit banking sector that intermediates capital. Monetary policy is coordinated with fiscal policy in the sense that all the seigniorage revenue gleaned through the inflation tax is spent to make efficient provision of public services. With the reserve requirement and money growth as instruments, policy coordination implies that one instrument may be solved endogenously when the other is predetermined. A higher reserve requirement being a binding constraint on capital creation generates adverse growth ffects. On the other hand, by endogenously reducing the money growth rate, a higher reserve requirement lowers inflation. Interestingly, when public services are not productive, policies need not be coordinated. In this scenario, we derive a non-standard result wherein a rise in reserve requirements raises inflation. We conclude with the suggestion that differences in the degree of policy coordination account for cross-country differences in the persistence of inflation. Journal: Philippine Review of Economics Pages: 253-282 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/111/725 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:253-282 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph J. Capuno Author-Workplace-Name: School of Economics, University of the Philippines, Diliman Author-Name: Orville C. Solon Author-Workplace-Name: School of Economics, University of the Philippines, Diliman Title: The Impact of Devolution on Local Health Expenditures: Anecdotes and Some Estimates from the Philippines Abstract: The Local Government Code of 1991 stipulates (1) the devolution of health facilities, functions and personnel from the national government to local government units, and (2) a corresponding increase in central transfers to local government units. However, interjurisdictional spillovers of local health programs and the locational bias of hospitals maintained by the national government are also the necessary consequences of decentralization. This paper presents estimates of the effects of devolved facilities, central transfers, cross-border use of facilities and the presence of retained hospitals on local health expenditure. Results show that (1) local health expenditures are positively affected by the number of devolved facilities in a given locality, (2) municipalities and cities are more responsive to block grants than provinces, and (3) poor localities or those which absorbed inordinate number of health facilities tend to free ride on their richer neighbours. Journal: Philippine Review of Economics Pages: 283-318 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/112/730 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:283-318 Template-Type: ReDIF-Article 1.0 Author-Name: Roehlano M. Briones Author-Workplace-Name: Department of Economics, University of the Philippines at Los Banos Title: Calorie Intake Responses to Macroeconomic Adjustment Abstract: The paper characterizes the responses of household calorie intake to stabilization and structural adjustment. Using a model of calorie intake response derived from a food demand model of Philippine households, it shows that elasticities of total calorie intake with respect to prices and income in absolute terms tend to fall with income, implying an increasing vulnerability to malnourishment of lower income groups to adverse shocks. Then using a general equilibrium model of the Philippine economy, it shows that the effect of the structural adjustment program (specifically the 1988-1992 tariff reform program) is small but positive on calorie intake, with higher proportional increases in consumption of calorie sources for the lower income groups. The study indicates that growth policies probably involve no short-term trade-off with nutrient intake, whereas implementation of stabilization policies requires close integration with targeted programs on nutrition intervention and food price subsidies. Journal: Philippine Review of Economics Pages: 319-342 Volume: 33 Issue: 2 Year: 1996 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/113/729 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:33:y:1996:i:2:p:319-342