The Economic Transition and Growth of Philippine Regions

Mapa, Dennis S. and Sandoval, Monica Flerida B (2011): The Economic Transition and Growth of Philippine Regions.

Abstract

The paper applies the economic transition models and econometric convergence tests proposed by Phillips and Sul (2006) using data on per capita Gross Regional Domestic Product (1988-2008) to determine if 14 Philippine regional economies converge to a steady state path over a period of time. The paper explores modeling and analyzing the economic transition behavior of the regions. Regional relative transition paths are investigated to generate a graphical overview of the behavior of the regional economies. The log t convergence test, which is constructed from a transition differential decay model, is used to establish if a region converges to a steady state path or diverges from a steady state path. The test basically provides the basis for a stepwise clustering algorithm in finding convergence clusters and analyzing transition behavior between clusters. The paper identifies convergence clubs and determines divergent regional economies using a recursive procedure that revolves around the log t convergence test.

• Item Type: MPRA Paper
• Language: English
• Keywords: log t convergence test, convergence clubs
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R5 - Regional Government Analysis > R58 - Regional Development Planning and Policy; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

References

Balisacan, A.M. and Hill, H. (2003). An Introduction to the Key Issues. In A.M. Balisacan and H. Hill (eds) The Philippine Economy: Development, Policies and Challenges. New York: Oxford University Press.

Mapa, D. and Balisacan, A. (2004), “Quantifying the Impact of Population on Economic Growth and Poverty: The Philippines in an East Asian Context.” In Sevilla, L.A. (editor), Population and Development in the Philippines: The Ties That Bind. AIM Policy Center.

Mapa, D.S., Balisacan, A.M. and Briones, K.S. (2006), “Robust Determinants of Income Growth in the Philippines.” Philippine Journal of Development (PJD), Volume XXXIII, Nos. 1-2, pp. 1-32.

Phillips, P. C. B. and Sul, D. (2006), “Economic Transition and Growth”, Paper presented at the 4th Econometric Study Group Meeting, Singapore Management University, Singapore.

Phillips, P. C. B. and Sul, D. (2007), “Transition Modeling and Econometric Convergence Tests”, Discussion Paper, Cowles Foundation

World Development Indicators (2003), World Bank

National Statistical Coordination Board (NSCB)

www.lpp.gov.ph