(DP 1989-19) An Annual Macroeconometric Model of the Philippines

Abstract

This paper presents the estimation and dynamic historical simulation results of a demand-driven macro model of the Philippines. The model covers the period 1967 to 1988 using annual data. The model has four main parts. A core model describes the real behavior of the economy while three sub-blocks represent the balance of payments (BOP), the government and the monetary accounts. The IS-LM framework is modified to include the portfolio balance approach to exchange rate determination. The first section makes an introduction. The second section gives a rough sketch of the main theoretical basis of the model. The last section shows the estimation and historical simulation results and the simulation statistics.