| Article ID: | iaor2001766 |
| Country: | Philippines |
| Volume: | 1 |
| Issue: | 1 |
| Start Page Number: | 1 |
| End Page Number: | 9 |
| Publication Date: | Jan 1998 |
| Journal: | Philippine Journal of Operations Research |
| Authors: | Bautista Carlos C. |
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 preliminary inputs. Under a flexible exchange rate regime, it is shown that capital inflows lead to an appreciation of the domestic currency. Nontradables outputs increase while those of the tradable goods sectors decline – an example of the Dutch Disease effect.