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The BSP’s monetary policy reaction function from 1992 to 2003

Author

Listed:
  • John Michael Ian S. Salas

    (University of the Philippines School of Economics)

Abstract

This paper attempts to empirically determine the Philippine central bank’s recent monetary policy stance before and after it adopted the inflation-targeting framework, as revealed by its interest-rate setting behavior. Employing Clarida, Galí, and Gertler’s [1998, 2000] forward-looking model, it finds that the Bangko Sentral ng Pilipinas (BSP) has indeed been stabilizing inflation by and large through its key policy rate, although it appears to be accommodative with respect to the output gap. In addition, currency stability and expansionary money supply (M1) growth are other concerns of the BSP, although significantly so only in earlier periods.

Suggested Citation

  • John Michael Ian S. Salas, 2006. "The BSP’s monetary policy reaction function from 1992 to 2003," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 43(2), pages 23-48, December.
    • Handle: RePEc:phs:prejrn:v:43:y:2006:i:2:p:23-48
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    File URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/247/609
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    Citations

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    Cited by:

    1. Taguchi, Hiroyuki, 2020. "Monetary Policy Rule and Taylor Principle by GMM and DSGE Approaches: The Case of Mongolia," MPRA Paper 104182, University Library of Munich, Germany.
    2. Ruch,Franz Ulrich, 2021. "Neutral Real Interest Rates in Inflation Targeting Emerging and Developing Economies," Policy Research Working Paper Series 9711, The World Bank.
    3. Hiroyuki Taguchi & Ganbayar Gunbileg, 2020. "Monetary Policy Rule and Taylor Principle in Mongolia: GMM and DSGE Approaches," IJFS, MDPI, vol. 8(4), pages 1-16, November.
    4. Mesa Wanasilp, 2021. "Monetary Policy Rules in Emerging ASEAN Economies: Adaptability of Taylor Principle," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 12(3), pages 255-274, July.

    More about this item

    Keywords

    inflation targeting; Taylor rule; monetary policy reaction function; stabilization; interest-rate setting;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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