The difference was likely attributable to the preference of residents to hold domestic assets rather than foreign assets (“home bias”) and also the existence of non-tradable goods. 2  The acceleration or deceleration of inflation depends on not only the current size of the output gap but also the difference between the actual real GDP growth rate and potential growth rate.
BSP organization My fellow workers at the BSP, central banks have often been described as the most powerful institution in the economic sphere: the monetary policy decisions made by the monetary authorities “can lift markets overnight, bring people out of unemployment, keep growth on track and hold inflation in check.”1Yet what central banks can do is ostensibly limited by a host of factors notably increasing globalization.