 The impact of Philippine monetary policy on domestic prices and output: evaluating the country’s transmission channelsSanjeev Parmanand
Philippine Review of Economics, 2022, vol. 59, issue 1, 46-76 Abstract: This paper examines the price and output effects of Philippine monetary policy through its transmission channels from 1996 to 2019 using Structural Vector Autoregression (SVAR) models. Recursive and non-recursive identi!cation strategies are implemented to build a model that represents the small open economy of the Philippines, which is affected by exogenous shocks in oil prices and US interest rates. Impulse response functions are then compared between recursive and non-recursive models to select results that demonstrate consistency with macroeconomic theory and overall statistical signi!cance. The Local Projections method is then applied as a means of verifying the accuracy of the preferred model’s results. Findings show that a contractionary shock to Philippine monetary policy has weak short-term effects on domestic output and prices. These results contribute to the literature by characterizing the strength of transmission channels 17 years after in"ation targeting was adopted as a primary component of Philippine monetary policy. Keywords: Philippine monetary policy; structural vector autoregression; Local Projections method (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:phs:prejrn:v:59:y:2022:i:1:p:46-76 Access Statistics for this article More articles in Philippine Review of Economics from University of the Philippines School of Economics and Philippine Economic Society Contact information at EDIRC. |
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