Recent peso appreciation: effect of a strong Philippine economy or of a faltering United Dtate
Date
2011-04
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Abstract
Exchange rate determination has been the topic of recent economic study in light of the recent financial The The last crisis the world has experienced was mainly due to the failure of US household markets and the banks that went bankrupt as the market Asian although some Asian Philippines including the Philippines have not During affected much. During the start PhP the crisis, the PhP - USD exchange rate was seen in a decreasing trend after reaching PhP56 highest value This around PhP56 to USD1. This paper PhP on USD
exchange determines the PhP - USD This rate here in the country. This paper would seek to answer why was there an decrease of the exchange rates, and finally this paper would seek to answer what were the net effects that Philippines crises brought about - was it the Philippines and Peso, strong remittances that brought the appreciation of the Peso, or was it due Dollar.
This the weakening of the US economy and its Dollar. This paper would use VECM analysis that would see how much of the economic variables, as well as the crises, actually affect the exchange rate.
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Keywords
Nominal Exchange rate, Inflation rate, Remittances, Global financial crisis, Asian financial crisis, Interest rate, Vector Error Correction Model.