Browsing by Author "Orani, Prudencia R."
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Item Restricted A socio-economic analysis of Filipino overseas seabased workers(1988-02-28) Orani, Prudencia R.; Manzano, Raymund M.; Natividad, FidelinaItem Restricted Is currency devaluation contradictionary? the case of the Philippines(1993-06) Orani, Prudencia R.; Clarete, Ramon L.This paper examines the contractionary devaluation issue, particularly the empirical evidence for the case of the Philippines. A modified version of Nag's (1990) macroeconometric model consisting of aggregate demand and aggregate supply functions of a small, open economy is used for this purpose. The analysis is short-run in nature, focusing on the impact effect of devaluation on output and prices, given other things equal. The study looks into whether devaluation effects net contraction or expansion on the domestic economy and whether such economic contraction or expansion stems primarily from demand- or supply-side forces. On one hand, the hypothesized demand side channels of contractionary devaluation are: the negative real balance effect; income redistribution from low to high savers (i.e., from the private sector to the government); presence of initial current account deficit, or fiscal deficit, or government revenues that are affected by the devaluation, as well as a huge foreign debt, specifically, the concomitant debt service payments; and, the presence of a substantial amount of foreign capital in the devaluing country. On the other hand, the hypothesized supply-side channels of contractionary devaluation are: rise in the cost of imported inputs; real wage indexation; and, domestic credit squeeze.