[Blueboard] ACERD Seminar: Avoiding Anomalies of GDP in Constant Prices by: Dr. Jesus Dumagan

Sairry R. Sandoval ssandoval at ateneo.edu
Thu Nov 13 16:19:11 PHT 2008

Date  : November 26, 2008
          Wednesday, 430-600PM

 Place: Multi-Purpose Room 2 (SS 264), 2nd Flr., SocSci Bldg.

Avoiding Anomalies of GDP in Constant Prices by Conversion to Chained
Prices: Accentuating Shifts in Philippine Economic Transformation

 By: Dr. Jesus Dumagan
Senior Visiting Research Fellow, Philippine Institute for Philippine Studies


 Changing the base year (1985) of Philippine GDP in constant prices
could change the growth rate and the shares of components even when
 there is no change in the volume of production, implying that the
 changes in growth rate and shares are anomalous (i.e., no real basis).
 This possibility weakens GDP in constant prices as basis for valuing
 our economy's production and analyzing its growth performance. This
 paper demonstrates that conversion to chained prices avoids the above
 anomalies and also shows smaller and shrinking agriculture and
 industry sectors and enlarging services sector that is now over 50
 percent of the Philippine economy than are shown by valuation in
 constant 1985 prices. In both contributions to level and growth of
 GDP, chained prices accentuate more than constant 1985 prices the
 declining importance of agriculture and industry and the rising
 importance of services in Philippine economic transformation.

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