Silviase/jgov_v1.4_full_ann huggingface dataset:
Chart 1-15 Real GNP Growth Rate (%): INDONESIA

Chart 1-16 Consumer Price Inflation Rate (%) : INDONESIA

Chart 1-17 Current Account Balance (%): INDONESIA
Chart 1-18 Real GNP Growth Rate (%): PHILIPPINES

Chart 1-19 Consumer Price Inflation Rate (\%) : PHILIPPINES

Chart 1-20 Current Account Balance (%): PHILIPPINES
Table 1-1 Main Economic Indicators of Japan, Korea, Indonesia and the Philippines

Per capita GNP 1990 US$(a) (Growth rate) (1965-90 %)	Real GDP Growth (%)(b) (71-80) (81-90)	Inflation (%) (65-80) (80-90)	External debt (%)(a) Debt/GNP 1980	DSR 1990	1980	1990	1990
Japan	25430 (4.1)	4.5	4.3	9.2	1.7	---	---	---	---
Korea	5400 (7.1)	8.7	9.9	16.4	6.5	48.7	14.4	19.7	10.7
Indonesia	570 (4.5)	7.9	5.5	17.6	8.8	28.0	66.4	13.9	30.9
Philippines	730 (1.3)	6.2	1.2	13.6	14.6	53.8	69.3	26.6	21.2

(Source) (a) The World Bank, World Development Report 1992

(b) Asian Development Bank, Asian Development Outlook 1991

(c) GDP growth rate and rate of inflation of Japan were from IMF, IFS. (note) Inflation rate is based on consumer price index.

Table 1-2 Current Account Balance (% of GNP)

Japan	Korea	Indonesia	Philippines
1970	1.0	-7.2	---	-0.7
1971	2.5	-9.0	-3.8	-0.4
1972	2.2	-3.6	-3.0	0.1
1973	0.0	-2.3	-3.0	5.0
1974	-1.0	-11.0	2.4	-1.2
1975	-0.1	-9.3	-3.8	-5.7
1976	0.6	-1.1	-2.5	-5.9
1977	1.5	0.0	-0.1	-3.6
1978	1.7	-2.2	-2.9	-4.6
1979	-0.9	-6.5	2.0	-5.1
1980	-1.1	-8.8	4.3	-5.4
1981	0.4	-6.9	-0.7	-5.4
1982	0.7	-3.7	-6.1	-8.1
1983	1.8	-2.0	-7.7	-8.1
1984	2.8	-1.6	-2.2	-3.5
1985	3.6	-1.0	-2.3	-0.3
1986	4.2	4.5	-5.1	3.2
1987	3.6	7.6	-2.9	-1.3
1988	2.7	8.2	-1.7	-1.0
1989	2.0	2.4	-1.2	-3.3
1990	1.2	-0.9	---	-5.8

(Source) Asian Development Bank, Key Indicators of Developing and

Asian Member Countries, Volume XIV April 1983 and Volume XXII July 1991

Economic Planning Agency, Keizai Hakusyo(White Paper of Japanese Economy), 1992
### Chapter 2. On the Objectives of Monetary Policy

### 2.1 Introduction

This study evaluates monetary policy in Japan, Korea, Indonesia, and the Philippines, highlighting aspects of the short-run stabilization policies in those countries. It is well-known that during the early stages of development, economic growth is a principle objective of monetary policy. As reviewed in the previous chapter, this point applies to these countries. Thus many studies investigating monetary policy in these countries center on those issues. However, the importance of the short-run macroeconomic policy aspects also should not be dismissed. For example, the recent experience of some Latin American countries would surely make this point clear.

With recently collected macroeconomic quarterly data in these countries, we focus on the short-run stabilization aspects of monetary policy. In other words, this work attempts to answer the following questions: Do these countries pursue consistent monetary policies as short-run stabilization policy? If not, why? If so, how effective are those monetary policies? What are the differences among the monetary policies of these countries and why? Can the differences in the monetary policy explain the superior economic performance in some of the countries?

These issues are interesting because it will give us comparative perspectives on the monetary policies of Japan and three other countries, which might be useful in the future development of the region. Furthermore, those investigations are also quite absorbing since the economic growth achieved in the last decade in the east Asian countries was remarkable. For example, the real GNP growth rate for Indonesia, Korea, Malaysia, Philippines, and Thailand over the period 1968-1985 was 6.3%, considerably higher than the rest of the world. So more detailed knowledge of the conduct of monetary policies in these countries, in the fastest growing areas in the world economy, was and is still of great value for other developing countries.

It is obvious that careful empirical inquiries are needed to answer these questions. Nevertheless the lack of macroeconomic data, especially of the quarterly data, has been a serious obstacle for the development of such analyses. For example, Coats and Khatkhate (1978), a massive volume of collected papers, studied monetary policy and economic development in depth. However, in most of their empirical analyses they had to use annual data, sometimes even pooled cross-country data. $ ^{1} $ Macroeconomic quarterly data, especially
accumulated recently in Indonesia and the Philippines, now enable us to pursue this line of research.

The first job in the close examination of the monetary policies in any country would be an inquiry into the main objectives of the monetary policies. For this purpose, we use a simple econometric method to gain those perspectives. Such empirical method has, at least, two advantages: First, it permits us to obtain subjective information on the issue that would probably be tough to reach by checking, say, the official documents of the central banks. Second, it also enables us to access the quantitative as well as qualitative relevance of the macroeconomic objectives.

This chapter is organized as follows. Next section will summarize the empirical method used in this chapter. Section 2.3 explains the data. The estimated results would be shown in Section 2.4. Section 2.5 will discuss those results. The empirical results of the response function with moving regression method are shown in Section 2.6. The final section includes concluding remarks.

### 2.2 Empirical Methodology

To judge the empirical significance of the key macroeconomic variables for the monetary policy, we applied a methodology used in Dewald-Johnson (1967) to estimate the response (reaction) function of the monetary policy.

As tools for monetary policy the discount rate of the central bank and money supply is usually examined in this type of approach. There may exist more suitable country-specific instruments. $ ^{2} $ It is well known that credit rationing was widely adopted, especially during the early years, as an important element of monetary policy in these countries. Thus another measure of monetary policy, such as total lending of the banking sector, might be a more appropriate indicator of monetary policy under those circumstances. Furthermore, adjusting reserve requirement has been widely used as a monetary policy instrument during early years as well. For example, the Bank of Korea was allowed to impose marginal reserve requirements of up to 100% of incremental increase in deposits. Furthermore, rather frequent and drastic change of minimum requirement ratio has been observed in practice in these

demand functions for the selected Asian countries.

$ ^{2} $ For example, according to Zialcita and Gonzalez (1991), prior to 1984, the immediate target of monetary policy in Philippines was the Net Domestic Asset level. However with the outbreak of the balance of payments crisis in 1983, the immediate target has shifted to reserve money.
countries (except Japan). However, we concentrate on only these two measures of monetary policy in this study. $ ^{3} $

Furthermore, regarding the appropriate measure of the money supply, only M2 measures of money supply were investigated in this chapter. Nonetheless, M1 or another concepts of monetary aggregates might be particularly appropriate especially for a specific period. For example, according to Layman (1988), prior to 1965, monetary policy of Korea focused on M1. Nevertheless, during the 1970's the authorities started to pay more attention to the M2 concept of money supply. $ ^{4} $ Inclusion of these considerations for individual countries only remains to be seen.

Another important issue to be discussed here is the endogenously of money supply under the fixed exchange rate system. It is well-known that under the fixed exchange rate system with free capital mobility, central banks theoretically cannot control money supply $ ^{5} $ . However, the degree of openness of the economy is an empirical issue to be examined. Furthermore, in a very stimulating empirical study, Fry-Lillien-Wadhwa (1988) found a result that is consistent with the assertion that independent monetary policy can be pursued for the Pacific Basin counties (Indonesia, Korea, Malaysia, Philippines and Thailand). The estimated results showing the degree of sterilization for these Pacific Basin countries were comparable to those of most industrial countries. We believe that empirical analysis on monetary policy of four countries still deserves some attention.

Let us explain the procedure in case of money supply. As a first step, it is supposed that desirable money growth rate is determined by the following macroeconomic variables. (All variables are expressed in natural logarithm, except $ B_{t} $ )

$$ \Delta\mathbf{M}_{\mathrm{t}}^{*}=\boldsymbol{\alpha}_{\mathrm{o}}+\boldsymbol{\alpha}_{1}\Delta\mathbf{X}_{\mathrm{t}}+\boldsymbol{\alpha}_{2}\Delta\mathbf{P}_{\mathrm{t}}+\boldsymbol{\alpha}_{3}\mathbf{B}_{\mathrm{t}}+\boldsymbol{\alpha}_{4}\Delta\mathbf{E}_{\mathrm{t}} $$

where

$$ \Delta Z_{\mathrm{t-1}}=Z_{\mathrm{t}}-Z_{\mathrm{t-1}} $$
$ X_{t} $ : real GNP

Pt: price level

$ E_{t} $ : exchange rate (measured in own currency per dollar)

$ B_{t} $ : current account surplus

$\Delta M_{t}^{*}$ : desirable money growth rate

Standard macroeconomic arguments suggest subsequent sign conditions for respective coefficients; For real GNP, “leaning against the window” argument implies $ \alpha_{1}<0 $ . Tight monetary policy should be adopted against ongoing inflation, hence $ \alpha_{2} $ should be negative. $ ^{6} $

Under the fixed exchange rate system, as current account deficits require restrictive monetary policy, $ \alpha_{3} $ has to be positive. Though in a pure flexible exchange rate system no government intervention should be applied, in reality, there might exist some justification for those actions. Here we might expect that against devaluations of its own currency, monetary authorities respond those by tightening of monetary conditions, thereby inducing more capital inflow. This suggests $ \alpha_{4}<0 $ .

As a second step, the following partial adjustment mechanism to achieve desirable money growth rate is postulated.

$$ \begin{aligned}\Delta\mathbf{M}_{\mathbf{t}}-\Delta\mathbf{M}_{\mathbf{t}-1}=\delta(\Delta\mathbf{M}_{\mathbf{t}}^{*}-\Delta\mathbf{M}_{\mathbf{t}-1})\\0\leq\delta\leq1\end{aligned} $$

Substituting equation (2.1) into (2.2) results in final equation to be estimated,

$$ \Delta\mathbf{M}_{\mathrm{t}}=\Psi_{\mathrm{o}}+\Psi_{1}\Delta\mathbf{X}_{\mathrm{t}}+\Psi_{2}\Delta\mathbf{P}_{\mathrm{t}}+\Psi_{3}\mathbf{B}_{\mathrm{t}}+\Psi_{4}\Delta\mathbf{E}_{\mathrm{t}}+\Psi_{6}\Delta\mathbf{X}_{\mathrm{t}-1} $$

It is clear from this calculation that expected signs of $ \Psi_{i} $ coincide with those of $ \alpha_{i} $ . Furthermore, we should anticipate opposite signs for the discount rate equation. In actual implementation, as indicators of real economic activity, indexes of industrial production were examined in addition to real GNP. Also, wholesale price indexes, consumer price indexes, and GNP deflators were all used for inflationary considerations. Finally, as trade variables, foreign reserves were investigated as well as current account balance. Furthermore, though our final equation to be estimated contains lagged dependent variables, preliminary
estimates indicate serious problems with the serial correlation of the error term. Hence, the equations were re-estimated with the Cochrane-Orcutt method to correct those problems. $ ^{7} $

### 2.3 The Data

The data for Japan were taken from the EPA data tape for the Japanese Economy. All of the remaining financial data, except real GNP and GNP deflator, data for Korea, Indonesia, and the Philippines, were taken from IFS (International Financial Statistics). Real GNP and GNP deflator data for Korea were provided by Korean Development Institute. Same data for Indonesia was provided by Central Bureau of Statistics. Furthermore, NEDA provided those data for the Philippines. All of the flow variables were deseasonalized by the Census method in EPA.

Let us briefly explain the sample periods for each country. For Japan, we divided the data into two sub-periods, 1962:III 1973:I and 1973:II 1990:I, due to the differences in the exchange rate system. Same reason applies for the division in 1980 for Korea. However, divisions for the Philippines and Indonesia were not so straightforward. In the case of the Philippines, as the data were available only from 1981:III to 1990:I, because of the degree of freedom problem no subdivision was allowed. Finally, there is a sober issue of the data discontinuity for Indonesia. Old data were from 1976:III till 1983:IV and new series started from 1983:III to 1990:I. This simply obliges us to use two data sets as if those are entirely different sub-periods.

### 2.4 Estimated Results

Due to potential multicollinearity problem, often occurring among macroeconomic variables, the following two-step estimation procedure was adopted. First procedure was that equation $ (2.3) $ was estimated with only single macroeconomic variable as an objective for the monetary policies. Then equation $ (2.3) $ was re-estimated with all, in principle, of the macroeconomic variables which were found individually significant in the first stage regressions. The estimated results of the response function were contained in the Table 2.12. Let us in turn review the results.

## (i) Japan
TABLE 2.3: JAPANESE REACTION FUNCTION M2, 1962: III - 1973: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	DR(-1)	ρ	R²	DW
-0.04	1.474	.476	-.408	.394	1.91
(-2.897)	(2.693)	(3.031)	(-2.244)
-0.117	.395	.219	.008	2.112
(-1.426)	(.51)	(1.422)
.0001	-.019	.157	.11	2.095
(-0.119)	(-2.203)	(1.055)
.0085	-1.038	.534	-.402	.303	1.795
(.665)	(-1.264)	(3.239)	(-2.11)
.0164	-.094	.657	.387	2.101
(2.984)	(-.701)	(5.333)
-.003	-.002	.170	.031	2.026
(-.343)	(-1.104)	(1.073)
-.0367	1.031	.439	-.453	.504	2.03
(-3.794)	(3.789)	(3.083)	(-2.62)
-.03	-.009	.92	.382	-.419	.496	2.089
(-2.674)	(-1.214)	(3.215)	(2.364)	(-2.17)

Notes: GNP=growth rate of real GNP, PW=rate of change of whole sale price index, BP=current account surplus.

PC=rate of change of consumer price index, DEF=rate of change of GNP deflator, R=foreign reserve.

IP=growth rate of industrial production index. MR(-1)=lagged value of growth rate of money supply.

ρ=serially correlated error term, R²=adjusted R², DW=Durbin-Watson statistics.

Numbers in the parentheses indicate t values.

TABLE 2.4: JAPANESE REACTION FUNCTION M2, 1973: IV - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	E	DR(-1)	ρ	R²	DW
-.025	2.257	.669	-.306	.427	2.00
(-1.454)	(1.503)	(5.499)	(-1.995)
-.013	1.445	.287	.281	1.967
(-1.053)	(2.473)	(2.197)
-.001	-.0003	.476	.212	2.167
(-.039)	(-.187)	(4.248)
-.0007	-.143	.487	.212	2.189
(-.0413)	(-.156)	(4.187)
.009	-1.306	.675	-.307	.427	1.961
(.753)	(-1.491)	(5.470)	(-2.001)
-.028	.0007	.474	.238	2.235
(-1.324)	(1.485)	(4.407)
-.009	.868	.647	-.301	.430	1.942
(-.984)	(1.727)	(5.486)	(-1.976)
.002	.574	.549	-.309	.475	1.917
(.175)	(2.777)	(4.609)	(-2.067)
-.005	.038	.878	.563	.576	-.373	.523	1.969
(-.509)	(.065)	(1.918)	(2.534)	(4.117)	(-2.500)
### TABLE 2.1: JAPANESE REACTION FUNCTION DISCOUNT RATE, 1962: III - 1973: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	M2(-1)	ρ	R²	DW
.0129	-.203	.81	-.419	.696	1.915
(2.672)	(-2.227)	(8.171)	(-2.385)
.0167	.081	.614	.385	1.927
(2.953)	(.568)	(4.697)
.012	.005	.667	-.398	.75	1.917
(2.905)	(3.865)	(6.611)	(-2.193)
.015	.097	.623	.387	2.026
(2.771)	(.686)	(5.032)
.016	-.093	.657	.387	2.101
(2.984)	(-.701)	(5.333)
.019	.0004	.525	.415	1.893
(3.342)	(1.565)	(3.756)
.011	-.108	.823	-.389	.686	1.907
(2.297)	(-2.234)	(8.044)	(-2.146)
.012	.004	-.039	.695	-.436	.759	1.939
(3.001)	(3.091)	(-.84)	(6.906)	(-2.445)

See Table 2.1

TABLE 2.2: JAPANESE REACTION FUNCTION DISCOUNT RATE, 1973: IV - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	E	M2(-1)	ρ	R²	DW
.005	.052	.768	-.631	.574	2.217
(2.24)	(.576)	(8.777)	(-6.229)
.005	-.017	.788	-.641	.579	2.255
(2.407)	(-.726)	(8.818)	(-6.347)
.005	.00003	.777	-.633	.574	2.229
(2.294)	(.511)	(8.839)	(-6.265)
.005	.019	.754	-.616	.567	2.195
(2.579)	(.454)	(7.838)	(-5.847)
.005	.015	.762	-.622	.568	2.204
(2.552)	(.226)	(7.996)	(-6.044)
.005	.00001	.771	-.632	.576	2.222
(2.224)	(.708)	(8.851)	(-6.242)
.005	-.005	.774	-.628	.571	2.215
(2.547)	(-.205)	(8.728)	(-6.191)
.005	-.007	.779	-.634	.575	2.222
(2.415)	(-.595)	(8.861)	(-6.279)

See Table 2.1
According to Table 2.1, for the discount rate, real GNP and the current account surplus were significant at 5% level and industrial production was significant at 1% level in the first-stage regressions. In the second stage regression, industrial production and current account surplus were estimated jointly, where real GNP was excluded from regressions, because of the multicollinearity problem. While industrial production indexes were significant at the 1% level, current account surplus was not significant even at the 10% level. For the second period, inflation rate, measured as rate of changes in the wholesale price indexes, was significant at 5% level, with exchange rate being significant at 1% level in the individual variable regressions. Moreover, industrial production was significant at the 10% level, with real GNP being significant only at the 20% level. In the joint regression, wholesale price inflation rate was jointly examined with industrial production and exchange rate, though industrial production and exchange rate retained their significance, wholesale price inflation rate became insignificant.

In turn, according to Table 2.3 for the money supply regressions, current account surplus was significant at the 1% level. Industrial production and real GNP were significant at the 5% level for the first period as well. Moreover, foreign reserve was significant at the 20% level. In the joint estimation of current account surplus and industrial production, only current account surplus was significant at the 1% level in the second-stage regression. For the second period, quite surprisingly, none of the macroeconomic variables were significant.

## (ii) Korea

For the discount rate, only industrial production was significant at 10% level for the first period. Moreover, real GNP and industrial production were significant only at the 20% level for the second period. Second-stage regression was avoided for the obvious reason.

However, using M2, current account surplus was significant at the 5% level. Inflation, measured as a rate of change in the GNP deflator, was also significant at the 10% level in the first-stage regressions. Wholesale price inflation rate also was significant at the 10% level. Nonetheless, in the second-stage regressions, both current account surplus and inflation rates were significant only at the 10% level. As Japanese case, for the second period, none of the variables were significant (Tables 2.5 - 2.8).

## (iii) Indonesia

Only money supply data was available for this country. According to Tables 2.9 and 2.10, none of the variables were found to be significant with the correct sign for the first period. Inflation rate, measured as changes in the wholesale price indexes, was significant at 10% level for the second period.
### TABLE 2.5: KOREAN REACTION FUNCTION DISCOUNT RATE, 1970: III - 1979: IV

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	DR(-1)	ρ	R²	DW
-.014	.0186	-.561	.548	.275	2.087
(-.529)	(.051)	(-3.303)	(3.196)
-.020	.172	-.559	.543	.276	2.071
(-.684)	(.419)	(-3.294)	(3.146)
-.021	-.0002	-.563	.543	.277	2.063
(-.717)	(-.481)	(-3.317)	(3.131)
-.013	.259	.531	-.551	.265	2.082
(-.807)	(.644)	(3.024)	(-3.194)
-.017	.279	.509	-.534	.259	2.145
(-.953)	(.809)	(2.791)	(-2.968)
-.036	.016	-.538	.493	.252	2.053
(-.969)	(.757)	(-2.991)	(2.621)
-.027	.561	.512	-.549	.321	2.052
(-1.83)	(1.799)	(3.079)	(-3.192)

See Table 2.1

### TABLE 2.6: KOREAN REACTION FUNCTION DISCOUNT RATE, 1980: III - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	E	DR(-1)	ρ	R²	DW
-.046	1.311	.398	.178	1.883
(-1.63)	(1.636)	(2.706)
-.013	-.276	.400	.118	1.865
(-.558)	(-.206)	(2.706)
-.024	.00001	.349	.145	1.859
(-1.058)	(1.079)	(2.209)
-.009	-.409	.399	.12	1.868
(-.316)	(-.305)	(2.604)
.003	-1.283	.397	.143	1.894
(.12)	(-1.032)	(2.636)
-.023	.001	.399	.12	1.86
(-.701)	(.307)	(2.612)
-.05	1.22	.356	.174	1.899
(-1.646)	(1.578)	(2.364)
-.0136	-.95	.344	.138	1.823
(-.624)	(-.922)	(2.089)

See Table 2.1
TABLE 2.7: KOREAN REACTION FUNCTION M2, 1970: III - 1979: IV

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	M2(-1)	ρ	R²	DW
.064	.132	-.003	-.025	1.976
(5.402)	(.939)	(-.014)
.074	-.198	.006	.053	1.99
(5.769)	(-1.964)	(-.036)
.075	.00002	-.037	.081	1.964
(6.006)	(2.24)	(-.224)
.968	-.13	.037	-.031	2.066
(4.74)	(-.819)	(.214)
.067	-.194	.115	.07	2.02
(5.956)	(-2.137)	(.72)
.059	.004	.036	-.016	1.964
(5.085)	(1.092)	(.211)
.0595	.214	-.026	.033	2.099
(5.296)	(1.753)	(-.151)
.078	.00002	-.162	.0127	.137	1.973
(6.396)	(1.93)	(-1.816)	(.0782)

See Table 2.1

TABLE 2.8: KOREAN REACTION FUNCTION M2, 1980: III - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	IP	E	M2(-1)	ρ	R²	DW
.006	.071	.711	-.612	.549	2.092
(2.69)	(.776)	(8.303)	(-5.723)
.006	-.026	.748	-.632	.563	2.164
(2.944)	(-1.143)	(8.438)	(-6.022)
.006	.00003	.720	-.613	.547	2.078
(2.825)	(.582)	(8.305)	(-5.725)
.007	.0104	.701	-.599	.538	2.039
(3.127)	(.239)	(7.227)	(-5.356)
.007	-.013	.723	-.609	.543	2.072
(3.016)	(-.253)	(7.462)	(-5.615)
.005	.00001	.771	-.632	.576	2.222
(2.224)	(.708)	(8.851)	(-6.242)
.007	-.007	.715	-.607	.542	2.059
(3.157)	(-.234)	(8.169)	(-5.627)
.007	-.007	.721	-.613	.547	2.072
(2.996)	(-.636)	(8.319)	(-5.727)

See Table 2.1
TABLE 2.9: INDONESIAN REACTION FUNCTION M2, 1976: III - 1983: IV

CONSTANT	GNP	PW	BP	PC	DEF	R	M2(-1)	ρ	R²	DW
.037	.843	.187	.035	1.683
(2.498)	(1.183)	(1.06)
.045	.260	.119	.10	1.802
(3.957)	(1.859)	(.678)
.055	.000006	.145	.010	1.731
(3.855)	(.823)	(.721)
.034	.684	.13	.136	1.788
(2.622)	(2.169)	(.767)
.035	.483	.153	.145	1.755
(2.776)	(2.246)	(.918)
.046	.001	.195	-.01	1.67
(3.09)	(.327)	(.984)

See Table 2.1

TABLE 2.10: INDONESIAN REACTION FUNCTION M2, 1983: III - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	E	M2(-1)	ρ	R²	DW
.076	.479	-.394	.145	1.947
(6.124)	(1.552)	(-2.128)
.085	-.437	-.303	.161	1.979
(6.954)	(-1.715)	(-1.622)
.085	.000007	-.393	.064	1.951
(4.533)	(.367)	(-1.924)
.084	-.289	-.335	.067	1.946
(5.902)	(-.483)	(-1.638)
.08	.011	-.372	.059	1.936
(6.364)	(.047)	(-1.791)
.028	.011	-.397	.1	1.946
(.56)	(1.047)	(-2.076)
.080	-.063	-.336	.071	2.05
(6.359)	(-.569)	(-1.67)

See Table 2.1
### TABLE 2.11: PHILIPPINE REACTION FUNCTION DISCOUNT RATE, 1981: III - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	E	DR(-1)	ρ	R²	DW
.006	-.373	.374	.178	2.09
(.619)	(.353)	(2.403)
-.029	1.067	-.102	.615	1.925
(-3.363)	(6.23)	(-.773)
-.007	-.007	.381	.197	1.841
(-.568)	(-1.379)	(2.547)
-.039	1.513	-.174	-.446	.578	1.876
(-4.14)	(4.981)	(-.801)	(-2.375)
-.023	.923	.272	-.467	.713	2.113
(-3.104)	(4.478)	(1.821)	(-2.734)
.049	-.048	.338	.325	2.026
(2.768)	(-2.887)	(2.456)
-.014	.644	.224	.469	1.849
(-1.669)	(4.393)	(1.753)
-.003	.743	-.025	.301	.126	-.457	.8	2.022
(-.22)	(4.03)	(-2.33)	(2.591)	(.933)	(-2.465)

See Table 2.1

TABLE 2.12: PHILIPPINE REACTION FUNCTION M2, 1981: III - 1990: I, 1981: III - 1990: I

CONSTANT	GNP	PW	BP	PC	DEF	R	E	M2(-1)	ρ	$ \overline{R}^{2} $	DW
.048	-.652	.036	.041	2.02
(3.799)	(-1.817)	(.214)
.03	.773	-.229	.281	1.736
(2.63)	(3.883)	(-1.394)
.03	-.00007	-.071	.111	1.956
(2.291)	(-2.471)	(-.411)
.046	1.093	-.673	.477	.328	1.738
(2.142)	(2.889)	(-3.432)	(2.346)
.036	.673	-.206	.117	1.932
(2.859)	(2.528)	(-1.062)
.026	-.002	.492	-.45	.199	1.938
(1.209)	(-.109)	(2.282)	(-2.056)
.025	.596	.073	.266	1.896
(2.129)	(3.759)	(.492)

See Table 2.1