Fiscal policy regime- switching: evidence from the Philippines

Date

4-2014

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Harvey V. Baldovino

Abstract

The general objective of this study is to distinguish the active and passive fiscal policy regime years in the Philippines. Markov Switching Regression and the methodology of Khalid and Marwan (2012) were employed in characterizing the regimes. Historical accounts were reviewed and presented to provide potential explanations for the results of the regime-switching regression. The results show that the active fiscal policy regimes are years 1980 to 1984, 1989, 1999 to 2005 and 2010 to 2012. On the other hand, fiscal policy in the periods of 1985 to 1988, 1990 to 1998 and 2006 to 2009 were passive. These findings suggest that the country have been interchanging active and passive fiscal policy regimes throughout 1980 to 2012, which implies that there are also shifts from economic stabilization to debt stabilization and vice versa. Most active regimes were observed during periods of strong implementation of stabilization programs and inability to service debt while economic growth or recovery and debt servicing were observed during the passive regimes. These patterns, however, do not apply to all cases.

Language

English

Location

UPLB Main Library Special Collections Section (USCS)

Call Number

LG 993.5 2014 E2 A68

Document Type

Thesis

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