Money and uncertainty in the Philippines: A Friedmanite Perspective

Assad Baunto (), Christian Bordes (), Samuel Maveyraud and Philippe Rous
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Christian Bordes: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique
Philippe Rous: LAPE - Laboratoire d'Analyse et de Prospective Economique - GIO - Gouvernance des Institutions et des Organisations - UNILIM - Université de Limoges

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper aims to provide a unified theoretical framework of the two hypotheses proposed by Friedman: (i). increased variability of money supply results in the decline of income velocity of money and (ii) high inflation leads high variability of inflation which reduces potential output growth. This paper also provides empirical investigation to validate Friedman's hypotheses using Philippine data. The Philippine economy experienced persistently higher and more variable inflation rate and weaker macroeconomic performance relative to other Asian countries, and these characteristics provide ample opportunity to evaluate Friedman's proposals at work. Utilizing original methodologies (e.g. band‐pass filter), our findings validate both proposals.

Keywords: Friedman; GARCH; T‐GARCH; Bai‐and‐Perron technique; band pass filter (search for similar items in EconPapers)
Date: 2007-09
Note: View the original document on HAL open archive server: https://hal.science/hal-00308663
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Citations: View citations in EconPapers (3)

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Working Paper: Money and uncertainty in the Philippines: A Friedmanite Perspective (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00308663

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