Poverty Effects of the Philippines’ Tariff Reduction Program: Insights from a Computable General Equilibrium Analysis*

A computable general equilibrium micro‐simulation model is used to assess the economic and poverty impacts of tariff reduction in the Philippines. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, tariff reduction reduces the domestic cost of production, benefiting the outward‐oriented and import‐dependent industrial sector. The national poverty headcount decreases marginally as lower consumer prices outweigh the nominal income reduction experienced by the majority of households. However, both the poverty gap and severity of poverty worsens, implying that the poorest of the poor become even poorer.     

The Geography of Inventiveness in the Primary Sector: Some Initial Results for New Zealand, 1880–1895

At the turn of the twentieth century, New Zealand was one of the wealthiest nations in the world on a per capita basis. We examine the role of innovation in explaining New Zealand's economic performance. Using a new dataset on patent applications for the period 1880–95, we consider whether the geographical concentration of innovative activity influenced economic activity. We find relationships between agricultural and pastoral output indices and inventiveness and between different regions and related industries. The results, however, are relatively weak. We conclude that tests of agglomeration effects in New Zealand during this period deserve further attention.     

Re‐Examining the Role of Structural Change and Nonlinearities in a Phillips Curve Model for South Africa

Although studies generally find evidence of a Phillips curve‐type relationship in South Africa, uncertainty remains about the relevance of the model over a relatively long sample period, and whether conventional output gap measures are suitable proxies for demand pressure. This paper reviews research which shows that the Phillips curve model prevails over an extended sample, provided that the benchmark specifications include major structural changes in the balance‐of‐payments and labour market, and account for shifts in the root causes of inflation. When this is done, a linear specification with an output gap in levels correctly predicts the non‐trended inflation pattern over the period 1971(Q1)–1984(Q4), whereas a piecewise concave curve with an output gap in growth rates accurately forecasts the decelerating inflation pattern during 1986(Q1)–2001(Q2). A novel feature of the concave model is that it remains statistically robust and structurally stable when it is estimated until 2015(Q4). The concave model imparts a disinflationary bias, which suggests that monetary policy should be more expansionary during downswing phases of the business cycle and neutral during upswing phases. The analysis also considers how the shape of the Phillips curve might change if the balance‐of‐payments constraint on demand is relaxed in a significant way.