Capital Inflows in a General Equilibrium Setting
نویسنده
چکیده
Equilibrium Setting Carlos C. Bautista* A computable general equilibrium (CGE) model is constructed to examine the effects of capital inflows on the sectors of the Philippine economy. The CGE model has five production sectors, two households and two primary inputs. Under a flexible exchange rate regime, it is shown that capital inflows lead to an appreciation of the domestic currency. Nontradables output increases while those of the tradables goods sectors decline – a demonstration of the Dutch Disease effect. Tariff reduction in combination with capital inflows is also examined.
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