Delano Villanueva

• Doctor of Philosophy
• Special Consultant on Financial Programming and External Debt Sustinability at Bangko Sentral ng Pilipinas (BSP)

Recent empirical studies have examined the determinants of economic growth using country-average (cross-sectional) data. By contrast, this paper employs a technique for using a panel of cross-sectional and time series data for 98 countries over the 1960-85 period to determine the quantitative importance for economic growth of both country-specific...

This volume is a collection of published and unpublished papers that the author has written over the last two decades during part of his tenure at the International Monetary Fund, The South East Asian Central Banks Research and Training Center, and Singapore Management University. The policy-oriented book examines the links between macroeconomic po...

The model developed here postulates that learning through experience plays a critical role in raising labor productivity over time, with three major consequences. First, the steady-state growth rate (of output) becomes endogenous and is influenced by government policies. Second, the speed of adjustment to steady-state growth is faster, and enhanced...

This paper develops and discusses an open-economy growth model in a modi!ed Arrow learning-by-doing framework, in which workers learn through experience on the job, thereby increasing their productivity. Applying optimal control to maximize the discounted stream of intertemporal consumption, the model yields domestic saving rates of 18-22 percent o...

Abstract In the early 1960s, Pasinetti developed a closed economy Cambridge model of growth and income distribution involving the capitalist and working classes that led to what Samuelson and Modigliani referred to as the Pasinetti paradox, which says that the equilibrium rate of return on capital depends only on the saving rate of the capitalist...

The Harrod-Domar (H-D) growth model assumes a fixed capital-output ratio, signifying absence of substitutability between capital and labor, leading to a “knife-edge” problem wherein balanced growth of capital (fixed warranted rate) and labor (fixed natural rate) occurs only by accident, preventing the attainment of macroeconomic stability with full...

This volume consists of twelve chapters, covers both closed and open economies, and discusses the neoclassical theory of economic adjustment and growth and its econometric testing (Chapters 1-11), as well as its practice in a country case study (The Philippines, Chapter 12). It provides theoretical and practical support to the International Monetar...

In a two-class growth model of Pasinetti (1962), there is no financial intermediary that mobilizes bank deposits to be lent to the capitalist class for physical investment. The absence of a capital market also precludes workers from buying capitalists’ new issues of stocks and bonds to finance investment. Thus, the equilibrium rate of return to cap...

12 Chapters on the analytics and econometric testing of neoclassical growth models capped by a case study of an emerging economy (The Philippines). To be released May-June 2022.

This paper develops and discusses a neoclassical growth model with two inputs: physical capital stock and combined stock of human and intellectual capital. The production process is subject to diminishing returns to capital in perfect markets, in sharp contrast to new endogenous growth models that assume increasing returns to capital in imperfect m...

In light of robust econometric results on the determinants of labor participation in 36 advanced economies reported by Grigoli et al. (2018) and independently by CBO (2018), my paper modifies the Solow (1956) - Swan (1956), or S-S, growth model by making endogenous the rate of labor participation (exogenously fixed at a constant fraction of populat...

A collection of interrelated papers on the Macroeconomics of Adjustment and Growth.

The papers collected in this volume were written for a conference held at the Hong Kong Monetary Authority in November 2005. It was organised jointly by the BIS Representative Office for Asia and the Pacific in Hong Kong SAR and the Hong Kong Institute for Monetary Research. The objective of the conference was to take stock of the current practice...

This paper examines the notion of sustainability of current account deficit using the consumption smoothing approach model. Empirical evidences suggest that the current account deficits in Indonesia, Malaysia and the Philippines can be explained by the model. Results also show that prior to the crisis, there was some degree of over-borrowing but it...

This volume is a collection of published and unpublished papers that the author has written over the last two decades during part of his tenure at the International Monetary Fund, The South East Asian Central Banks Research and Training Center, and Singapore Management University. The policy-oriented book examines the links between macroeconomic po...

This chapter discusses the concept of time deposits in the definition of money and presents cross country inflation evidence. In the June 1970 issue of the Economic Rccord , J. Conlisk presented some cross country inflation evidence on the moneyness of time and savings deposits. He concluded that the evidence there is indicates that savings and tim...

Le présent document expose les aspects théoriques et empiriques de la relation entre les politiques macroéconomiques et le taux de croissance à long terme du PNB. Les politiques macroéconomiques examinées ici sont les politiques budgétaire, monétaire et de taux d`intérêt, la politique du secteur extérieur et la politique de réforme des marchés des...

High ratios of external debt to GDP in selected Asian countries have contributed to the initiation, propagation, and severity of the financial and economic crises in recent years, reflecting runaway fiscal deficits and excessive foreign borrowing by the private sector. Applying the formal framework proposed by Villanueva (2003) to a selected group...

High ratios of external debt to GDP in selected Asian countries have contributed to the initiation, propagation, and severity of the financial and economic crises in recent years, reflecting runaway fiscal deficits and excessive foreign borrowing by the private sector. More importantly, the servicing of large debt stocks has diverted scarce resourc...

The IMF's second self-evaluation report on capital account crises in Indonesia, Korea and Brazil shows the same degree of independence of judgment, nuanced economic reasoning and forthrightness discernible in its first. Some of the Fund's most controversial prescriptions, in terms of fiscal and monetary policy in all three countries, are meticulous...

Adverse shift in investors’ confidence in Asia was associated with weak fundamentals, particularly those pertaining to the external and financial sectors. Lessons from the crisis include strengthening those fundamentals, creating a large liquidity fund, and designing loss-sharing arrangements involving private lenders and borrowers.

This paper draws on COIC's experience with deposit-taking institutions during the 1980s and 1990s and presents a number of early warning indicators of financial distress. Early warning indicators do not eliminate bank failures. However, they should lead to early intervention and consequently help reduce losses to deposit insurance funds or governme...

This volume contains selected papers presented at the Eleventh SEACEN Meeting of Directors of Supervision held in Kuala Lumpur, 8-10 October 1997. It covers an opening address and introduction; financial system soundness and monetary and supervisory policies; approaches to risk-based supervision; the case for an international banking standard; and,...

This paper proposes a model of endogenous economic growth and distribution explicitly incorporating social extraction and political competition, with an application to the Philippine historical experience. The major objective is to explain developments in the distribution of national income and wealth and in the growth rate of per capita capacity o...

Although conventional wisdom suggests that reducing military spending may improve a country's economic growth performance, empirical studies have produced ambiguous results. This paper extends a standard growth model and obtains consistent panel data estimates of the growth retarding effects of military spending via its adverse impact on capital fo...

A robust empirical determinant of long-term economic growth in many developing countries has been the expansion and diversification of the export sector. The latter, in turn, has been influenced by capital accumulation and economic growth. The growth model developed here explores this interdependence in the context of the "new growth theory". The a...

This paper provides an analytic overview of independent currency authorities (ICAs), sometimes called currency boards. ICAs issue and redeem domestic currency against an exchange standard on demand and back such operations through a 100 percent marginal foreign reserve cover. They also impose significant constraints on the banking system and the bu...

This paper reviews the theoretical and empirical aspects of the relationship between macroeconomic policies and the long-run rate of growth of GNP. The macroeconomic policies examined include fiscal policies, monetary and interest rate policies, external policies, and policies to reform the goods and labor markets, including adjustments of producer...

The effects of several policy and other macroeconomic variables on the ratio of private investment to gross domestic product in developing countries during 1975-87 is analyzed. Econometric evidence indicates that the rate of private investment is positively related to real GDP growth, level of per capita GDP, and the rate of public sector investmen...

This paper provides empirical evidence on the determinants of long-term growth performance in a sample of 55 developing countries grouped by income levels. The evidence indicates that a model incorporating the savings rate, export performance, expenditures on human capital development, population growth, and the real interest rate on external debt...

Economic stability, effective bank supervision, and an appropriate sequencing of stabilization, banking regulations, and interest rate policies are identified as common characteristics of the relatively successful experiments in financial sector liberalization. Recent theoretical developments help to explain why interest rates in free markets may f...

Analyses private investment rates for 23 countries over 1975-87. The results of this study, though preliminary, may help to identify more fundamental relationships between private sector investment and macroeconomic variables in these countries that can then be used to develop an appropriate structural model of investment behavior in developing eco...

Compared with the record of the post-war period up to 1970, the growth performance of developing countries in the 1970s and the 1980s has been rather disappointing. Investment rates in most of these countries have declined, but they have still been higher than domestic saving rates, making necessary substantial foreign borrowing. As a result, exter...

A simple aggregate growth model, capable of assessing the impact of macroeconomic policies on the long-term performance of a developing country, is formulated. The model emphasizes expenditures on the improvement of human capital and the dynamics of external debt, and it yields empirically testable hypotheses on the relative importance of various d...

Discussions on the cost of credit in less developed countries seldom include the transaction costs of lending. These costs consists of the cost of administering credit and the cost of risk of default. This study attempts to present estimates of these transaction costs of lending to the small-scale sector by different financial institutions in the P...

This chapter presents a semiannual macroeconometric model of the Philippines. The Philippines has recorded an impressive growth rate beginning from 1965. Gross national product at constant prices increased in this period at a compound rate of growth of around 6%. Despite the fact that population also rose at a compound rate of 3%, per capita real i...

This chapter discusses the concept of time deposits in the definition of money and presents cross country inflation evidence. In the June 1970 issue of the Economic Rccord, J. Conlisk presented some cross country inflation evidence on the moneyness of time and savings deposits. He concluded that the evidence there is indicates that savings and time...

This paper focuses mainly on the nature, scope and significance of selective credit policies, especially in the context of economic development. While such policies are being increasingly adopted in developed countries, when the impact of aggregative monetary policy on investment and consumption is found to be differential, recourse to selective cr...

Without Abstract

This paper analyzes the determinants of the money multiplier in an open developing economy with a fixed exchange rate, using that of Venezuela as an illustration. The openness of the Venezuelan economy, in which investment activity can be financed either by domestic or by foreign borrowing without much impediment, implies that the foreign interest...

Dans la présentation habituelle du multiplicateur de la monnaie, aucun effort n'est fait pour expliquer les variations de valeur résultant pour celui-ci des changements accusés dans le comportement de certains facteurs tels que la demande de monnaie de la part du public, la demande des banques de réserves excédentaires et de réserves empruntÃ...

Econometric studies of the economy usually assume government policy variables as exogenously determined. Income, balance-of-payments, price and employment variables are assumed to be affected by changes in the policy variables, but the latter are assumed to be free from the influence of the former. If policy makers do not behave randomly with respe...

Dans le modèle des anticipations de la demande de monnaie ajustées de période en période, il existe une autocorrélation entre les termes d'erreur de l'équation réduite, même s'il n'existe aucune corrélation sérielle entre les résidus des équations structurelles sous-jacents. Cette observation permet de penser que l'on pourrait effectuer...

I. The modified CPCS model and its economic significance, 704. — II. The solution of the model, 706. — III. The equilibrium growth path, 707. — IV. Conclusion, 708.

This paper proposes a model of endogenous economic growth and distribution explicitly incorporating social extraction and political competition, with an application to the Philippine historical experience. The major objective is to explain developments in the distribution of national income and wealth and in the growth rate of per capita capacity o...

A robust empirical determinant of long-term economic growth in many developing countries has been the expansion and diversification of the export sector. The latter, in turn, has been influenced by capital accumulation and economic growth. The growth model developed here explores this interdependence in the context of the 'new growth theory'. The a...

This paper which touches on the links between the macroeconomic and microeconomic dimensions of monetary management, argues that bank soundness is a sine quo non of price stability (or exchange rate stability), and vice versa. It then describes the structural weaknesses of a banking system that create conditions for a financial crisis. The paper co...

This paper examines ex-post solutions to the recent financial crisis. It is noted that the standard prescriptions of budgetary cuts, tax increases, currency depreciation and high interest rates were not effective. To avoid future crisis and in the context of an open capital market, the paper proposes a longer-run policy strategy consisting of a thr...

This paper examines the notion of sustainability of current account deficit using the consumption smoothing approach model. Empirical evidences suggest that the current account deficits in Indonesia, Malaysia and the Philippines can be explained by the model. Results also show that prior to the crisis, there was some degree of over-borrowing but it...

Typescript. Thesis (Ph. D.)--University of Wisconsin--Madison, 1970. Vita. Includes bibliographical references (leaves 84-85).