Template-Type: ReDIF-Article 1.0 Author-Name: Francisco Dakila, Jr. Author-Workplace-Name: Department of Economic Research, Bangko Sentral ng Pilipinas Title: Alternative Monetary Policy Rules for the Philippines Abstract: A theoretical basis for modifying the currently popular nominal feedback rules is provided for the conduct of monetary policy so that they react to the forecasted inflation rate, instead of to current or past actual inflation. It is shown that such a modification reduces the risk of economic instability arising from the adoption of a nominal feedback rule, and thus produces results that are closer to the optimal solution. It is furthermore shown that given rational expectations, a forward-looking rule, and a money demand function that is not completely interest-inelastic, the optimal monetary policy entails some degree of policy activism. Friedman s constant money growth rule is therefore shown to be optimal only in a special case, i.e, when the money demand function is completely insensitive to the rate of interest. Empirical simulations are conducted, which support the view that forward-looking nominal instrument rules provide better performance in terms of keeping inflation closer to the targeted level. The simulations also provide a measure of the optimal degree of activism for monetary policy, as well as of the optimal forecasting horizon. Classification-JEL: E6 Keywords: monetary policy, inflation targeting Journal: Philippine Review of Economics Pages: 1-36 Volume: 38 Issue: 2 Year: 2001 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/46/549 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:38:y:2001:i:2:p:1-36 Template-Type: ReDIF-Article 1.0 Author-Name: Jude H. Esguerra Author-Workplace-Name: Institute for Popular Democracy in the Philippines Author-Name: Mokoto Ogawa Author-Workplace-Name: Ministry of Health, Labour and Welfare, Japan Author-Name: Milan Vodopivec Author-Workplace-Name: World Bank Title: Income Support for the Unemployed : Options for the Philippines Abstract: This paper evaluates existing income support programs for the unemployed in the Philippines, as well as programs used for this purpose in other countries. It provides a systematic survey of both arguments in favor of and against a certain program. By placing the discussion in the framework of general risk management, effort is made to adopt a holistic view and treat income support systems for the unemployed in the wider context of other formal and informal mechanisms of social risk management. Particular attention is devoted to the interconnection between unemployment support programs and the financial and, above all, the labor market, the latter being of utmost importance for enhancing the self-protection capacity of individuals and households. Classification-JEL: H4, I3, J6 Keywords: risk management, income support Journal: Philippine Review of Economics Pages: 37-66 Volume: 38 Issue: 2 Year: 2001 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/47/555 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:38:y:2001:i:2:p:37-66 Template-Type: ReDIF-Article 1.0 Author-Name: Rolando A. Danao Author-Workplace-Name: University of the Philippines School of Economics Title: Short-run Demand for Residential Electricity in Rural Electric Cooperatives Franchise Area Abstract: A short-run demand model for residential electricity is estimated for households served by the Rural Electric Cooperatives using data from the 1997 Family Income and Expenditure Survey. The results support earlier findings that the short-run residential demand for electricity is income and price inelastic. The results also show that household size, urban location, age and educational level of the household head have significant positive effects on household electricity consumption. Classification-JEL: C2, Q2, R2 Keywords: econometric methods, household analysis, energy Journal: Philippine Review of Economics Pages: 67-82 Volume: 38 Issue: 2 Year: 2001 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/48/548 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:38:y:2001:i:2:p:67-82 Template-Type: ReDIF-Article 1.0 Author-Name: Renato E. Reside, Jr. Author-Workplace-Name: University of the Philippines School of Economics Title: Two Decades of Vector Autoregression (VAR) Modeling Abstract: A vector autoregression (VAR) is defined as a vector of endogenous variables regressed against its own lags. VARs therefore are considered part of a general class of simultaneous equations models. By construction, VAR analysis allows us to examine over time the dynamic impacts of innovations to variables on others. The following is a survey of the literature on vector autoregressions (VARs) in the last twenty years since it was first used for policy analysis by Christopher Sims [1980]. Initially, imposing a recursive structure on VAR disturbances had led to criticism that VAR modeling is atheoretical. In tha last decade, however, a number of authors have attempted to remedy the problem by introducing new structural identification techniques. This has enhanced the ability of VARs to model dynamic economic relationships. VAR studies have been used primarily to identify the impacts of aggregate demand and supply shocks on aggregate output, as well as to identify the channels and impacts of monetary policy. The frontiers of current VAR research focus on open economy extensions, as well as on improving lag selection and estimation. Classification-JEL: C32, C51 Keywords: vector autoregressions Journal: Philippine Review of Economics Pages: 83-121 Volume: 38 Issue: 2 Year: 2001 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/49/557 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:38:y:2001:i:2:p:83-121 Template-Type: ReDIF-Article 1.0 Author-Name: Mahar Mangahas Author-Workplace-Name: Social Weather Stations Title: Subjective Poverty and Affluence in the Philippines Abstract: Surveys of self-rated poverty, done in the Philippines at the national level 56 times over 1983-2001, quarterly since 1992, demonstrate that poverty is volatile even in the short run. The self-rated poor are about twice as many as the poor officially defined. The official poverty line meets the subjective needs of only half of the self-rated poor. Surveys into food-poverty, hunger, and illness are internally consistent. New surveys on the subjective threshold of affluence find that, like the subjective threshold of poverty, it increases with schooling. For most people, the affluence threshold is only some three times their poverty threshold. Classification-JEL: F16 Keywords: poverty, poverty threshold, Philippines Journal: Philippine Review of Economics Pages: 122-134 Volume: 38 Issue: 2 Year: 2001 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/50/554 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:38:y:2001:i:2:p:122-134