About Per SE

Commentary and research on current events and public policy by economists from the University of the Philippines
Posts tagged "macroeconomics"

The US economic recovery and growth

It has been a full year since I commented on the world economy. The US economy is important to all open economies – through the influence it has on trade, investment and productive activity.

Investing in an uncertain and slower world

There is a small group of wealthy Filipinos who are in search of investment opportunities. They might find an economy that is expanding, albeit at a slower rate, a stock market that’s less vibrant than before, and a real estate market that’s losing steam. In brief, potential investors may have to be more cautious, selective,...

Why hasn’t Japan’s massive government debt wreaked havoc (yet)?

[with Takaaki Nomoto and Akiko Terada-Hagiwara] The potential sovereign debt crisis in Japan looks even grimmer than those in the Eurozone economies if one looks only at the gross general government debt-to-GDP ratio. Japan’s gross general government debt-to-GDP ratio is more than twice the OECD-wide average (109 percent) and by far the highest in the...

‘Time inconsistency’: the Phillips Curve example

We provide the algebra and a panel diagram to attempt to examine the so-called inflation- unemployment (or Phillips curve, or aggregate supply) example. This is used to analyze whether there is indeed “time inconsistency” or “dynamic inconsistency” in the said example.

An exercise on discrete-time intertemporal optimization

Using the different alternative methods of dynamic optimization we derive the conditions that must be satisfied by the solution to the so-called Ramsey problem in a way that can be understood by advanced undergraduate economics students.

Recent macroeconomic developments: the peso, local stocks, and US ‘quantitative easing’

We witnessed in the last week some macroeconomic directions that demonstrate how vulnerable we could be to what happens in the world beyond our borders. The changes do not alter the country’s economic fundamentals which remain essentially sound.

Investment questions

Largely unnoticed in the back-and-forth over last year’s glowing growth figures was a curious statistic: investment actually fell as a proportion of GDP, 19.4 percent versus 21.6 percent in 2011. What gives?

Expanding economy, disappearing jobs

Gross domestic product (GDP), the sum of the economy’s total output, grew by 6.6% in 2012. That’s strong growth compared to the country’s long-run growth potential, which I estimate to be slightly less than 5%. But is the 6.6% growth sustainable and inclusive? The answer is maybe and no, respectively.

Credit ratings and Philippine macroeconomic fundamentals

The government is keenly sensitive to the credit rating given to the Philippines as borrower in the world capital markets. Credit ratings are made by professional rating agencies to provide assessment on a particular borrower’s (corporate or government) likely ability to repay its debts.

2012 in review

It may be rather late to do a yearender, but much of what I’ve read so far tends to be either fulsome or excessively critical. So this is going to be a pluses-and-minuses review, albeit partial, of both the economy and the polity, with the time period under review including the first nine days of...

Economic tidings of cheer for Christmas 2012

Good tidings for the nation on Christmas 2012 will further bring promising economic news for 2013 and beyond. Toward the third year of Benigno Aquino III’s six-year presidency, concrete signs of the national economy’s growth prospects and better living standards appear to be in our future.

The peso appreciation and monetary-fiscal coordination

The paper tracks the exchange rate experience of the Philippines with four other East Asian neighbors and finds that the Philippine appreciation is most severe. The paper asserts that exchange rate policy is a matter of policy discretion even under the regime of market-based exchange rates.