Date Published:
Dec 26, 2018
Focus Area(s):
DP 2018-39

This scoping paper traces the evolution of macroeconometric modelling approaches in literature. In particular, the Cowles Commission Approach, the , the London School of Economics Approach, and the General Equilibrium method are discussed by focusing on the theoretical underpinnings and assumptions of and criticisms on each model. The paper also provides a summary of the past and present macroeconometric models of the Philippine economy and highlights the strengths and criticisms of each model. The stock-taking indicates that there is a need for a new macroeconometric model for the Philippines considering that the only active model lacks further details on the real sector and is intended to address policy questions in the monetary sector. The development of a new macroeconomic model is also consistent with the needs of the major macroeconomic policy making bodies of the State, such as National Economic and Development Authority and the Bangko Sentral ng Pilipinas, to conduct macroeconomic surveillance, analysis and policy simulations.

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