Financing Decisions, Rational Expectations, and the "Crowding Out" Effect: The Case of the Philippines

Ma. Socorro Gochoco
Additional contact information
Ma. Socorro Gochoco: School of Economics, University of the Philippines Diliman

No 198806, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: This study is an empirical test of the validity of the traditional "crowding out" effect versus the Ricardian Equivalence Theorem in the case of a developing country, the Philippines. The assumption of rationality of expectations, and a generalized least squares procedure with cross-equation constraints are used. The data are monthly, covering the period January 1981 to December 1986. The results show that financing decisions matter and a significant "crowding out" effect exists and is discernible in the case of short-term Treasury bill rates. Furthermore, it does not arise because of irrationality on the part of the public but perhaps because of certain structural features in developing countries which allow bonds to add to net wealth.

Date: 1988-05
References: Add references at CitEc
Citations:

Published as UPSE Discussion Paper No. 1988-06, May 1988

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:198806

Access Statistics for this paper

More papers in UP School of Economics Discussion Papers from University of the Philippines School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by RT Campos ().