Modelling reality : a short history of selected Philippine macroeconometric models

This scoping paper aims to present a summary of the past and present macroeconometric models of the Philippine economy. This paper looks at the various approaches and methodology used in modelling the economy. The various approaches were compared and contrasted in order to find the best possible way to model the Philippine economy. The strengths and the criticism of each model is also highlighted. In particular, the Cowles Commission Approach, the LSE Approach, and the General Equilibrium method was discussed and evaluated. From the literature review, it appears that there is a need for a new model for the Philippines considering only one model is actively being used for policy simulations. The development of a new macroeconomic model is also consistent with the needs of the major macroeconomic policy making bodies of the State (NEDA, BSP, etc.) to conduct macroeconomic surveillance, analysis and policy simulations. [...]