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Item Restricted The relation of government deficit financing to monetary expansion in the Philippines, 1955-1965(1968-06) Terrel, Norma O.; Power, John H.It has been said that any economic leadership errs more often on the side of too much expansion rather than too little. Because it is human to overestimate benefits and to underestimate cost, almost everywhere, countries, especially developing ones encounter a deficit in their budgetary and developmental operations. Possibilities of capital formation by means of voluntary savings indirectly available have been found to be limited. Equally limited is the possibility of mopping up private savings by selling securities to investors. Consequently, these limitations have led to a growing interest in deficit financing or money creation. But while effective and temptingly easy in generating funds, it poses the threat of run-away inflation. In view of the disputed effects of deficit financing on monetary and price developments in the economy, we need a better understanding of the relationship that can be found between the fundamental monetary variables, i.e., deficit financing, money supply and the price level. This study hopes to take a step in that direction. The Philippine experience in the years 1955-1965 attests to the close relationship between deficit financing and monetary expansion. On the other hand, the impact of deficit financing on the price level could not be clearly ascertained, especially during 1962-1965. It was observed that there were several factors whose influence loomed large in the rising trend of the price level. This complication requires much more study than I have given it. It does not, however, affect the main point - the sensitivity of the price level to changes in the stock of money in the economy. Notwithstanding the risk involved in constant resort to deficit financing, it is hardly justifiable to utter condemnation to deficit financing for developmental purposes. One cannot, indeed, escape the conclusion that as a device to tide over the challenging problem of eco- nomic development, it requires an unusual amount of sell-discipline and foresight on the part of the countries that use it as a tool of fiscal policy. For, in the final analysis, the responsibility for the success of deficit financing lies in the hands that wield it, not certainly in its own mechanics.Item Restricted The short run economic effects of deficit financing(2001-10) Angeles, Leilani M.; Simborio, Syril B.