Structural Quarterly Projection Model for Belarus
Structural Quarterly Projection Model for Belarus

Author: Karel Musil

Publisher: International Monetary Fund

Published: 2018-12-07

Total Pages: 41

ISBN-13: 1484389271

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Belarusian authorities contemplate transiting to inflation targeting. The paper suggests a small structural model at the core of the forecasting and policy analysis system. A well-researched canonical structure of Berg, A., Karam, P. and D. Laxton (2006) is extended to capture specifics of Belarusian economy and macroeconomic policy. The modified model’s policy block reflects a monetary targeting regime and allows for transition from it to an interest-rate-based framework. Adding wages, directed lending and dollarization allow for studying implications of activist wage policy, state program lending, and dollarization for macroeconomic stability and the strength of the policy transmission mechanism.

Taking Stock of IMF Capacity Development on Monetary Policy Forecasting and Policy Analysis Systems
Taking Stock of IMF Capacity Development on Monetary Policy Forecasting and Policy Analysis Systems

Author: John C. Odling-Smee

Publisher: International Monetary Fund

Published: 1993

Total Pages: 68

ISBN-13: 155775327X

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This paper takes stock of forecasting and policy analysis system capacity development (FPAS CD), drawing extensively on the experience and lessons learned from developing FPAS capacity in the central banks. By sharing the insights gained during FPAS CD delivery and outlining the typical tools developed in the process, the paper aims to facilitate the understanding of FPAS CD within the IMF and to inform future CD on building macroeconomic frameworks. As such, the paper offers a qualitative assessment of the experience with FPAS CD delivery and the use of FPAS in the decision-making process in central banks.

A Projection Model for Resource-rich and Dollarized Economy: The Democratic Republic of the Congo
A Projection Model for Resource-rich and Dollarized Economy: The Democratic Republic of the Congo

Author: Victor Musa

Publisher: International Monetary Fund

Published: 2024-06-21

Total Pages: 66

ISBN-13:

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The paper introduces a semi-structural Quarterly Projection Model (QPM) tailored for the Democratic Republic of the Congo (DRC), highlighting its resource richness and high degree of dollarization. We provide an overview of the model's specifications to elucidate key features of the DRC economy and present its properties, evaluating its alignment with DRC data and assessing its goodness of fit. Additionally, the paper demonstrates the QPM's practical application through a counterfactual scenario, comparing policy recommendations with the actual policy responses of the Central Bank of the Republic of Congo to observed exchange rate and inflation pressures in 2023. Beyond the QPM, the paper showcases supplementary tools that enhance its utility for generating medium-term forecasts and developiong narratives in support of monetary policymaking. Specifically, we introduce the Nowcasting and Near-Term Forecast models, designed to assess the economy in real-time and predict short-term inflationary trends.

Republic of Belarus
Republic of Belarus

Author: International Monetary Fund. Monetary and Capital Markets Department

Publisher: International Monetary Fund

Published: 2020-05-15

Total Pages: 15

ISBN-13: 1513544195

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This Technical Assistance (TA) report on the Republic of Belarus focuses on various aspects of monetary policy modeling. This TA mission was the fifth from series of quarterly IMF TA missions focused on the forecasting and analysis system capacity building. It was mainly aimed to simulate initial conditions and compile a quarterly projection model (QPM)-based forecast scenario as a part of a practical forecasting round at the National Bank of the Republic of Belarus (NBRB) in March. Moreover, the mission worked with the modeling team to deepen its understanding of the QPM’s role in policy decision making and in internal communication. Adopting Inflation Targeting and increasing monetary policy effectiveness would require broad-based reforms as compressively outlined in the developed Road Map for Transitioning to Inflation Targeting. This medium-term TA project aims to primarily help the NBRB with medium-term inflation forecasting and policy analysis and related tools to effectively support policy making. The project composed of series of TA and training missions particularly focused on the preparation of forecasts and policy analyses, the medium-term forecasting and policy analysis model, and presentations of the forecasts and policy analysis.

An Open Economy Quarterly Projection Model for Sri Lanka
An Open Economy Quarterly Projection Model for Sri Lanka

Author: Chandranath Amarasekara

Publisher: International Monetary Fund

Published: 2018-06-25

Total Pages: 59

ISBN-13: 1484364511

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This study documents a semi-structural model developed for Sri Lanka. This model, extended with a fiscal sector block, is expected to serve as a core forecasting model in the process of the Central Bank of Sri Lanka’s move towards flexible inflation targeting. The model includes a forward-looking endogenous interest rate and foreign exchange rate policy rules allowing for flexible change in policy behavior. It is a gap model that allows for simultaneous identification of business cycle position and long-term equilibrium. The model was first calibrated and then its data-fit was improved using Bayesian estimation technique with relatively tight priors.

Inflation in Tajikistan
Inflation in Tajikistan

Author: Svetlana Vtyurina

Publisher: International Monetary Fund

Published: 2010-01-01

Total Pages: 21

ISBN-13: 1451962177

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This paper attempts to explain short- and long-term dynamics of-and forecast-inflation in Tajikistan using the Vector Error Correction Model (VECM) and Autoregressive Moving Average Model (ARMA). By analyzing different transmission channels through the VECM, we were able to evaluate their relative dominance, magnitude, and speed of transition to the equilibrium price level, with the view of identifying those policy tools that will enhance the effectiveness of monetary policy. We found that excess supply of broad money is inflationary in both the short and long term. The dynamic analysis also demonstrates that the exchange rate and international inflation have a strong impact on local prices. Available monetary instruments, such as the refinancing rate, have proven to be ineffective. Therefore, the Tajik monetary authority could greatly benefit from enhancing its monetary instruments toolkit, including by developing the interest rate channel, to improve its monetary policy execution and to achieve stable inflationary conditions.

Quarterly Projection Model for India
Quarterly Projection Model for India

Author: Mr.Jaromir Benes

Publisher: International Monetary Fund

Published: 2017-02-13

Total Pages: 41

ISBN-13: 1475578709

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This paper outlines the key features of the production version of the quarterly projection model (QPM), which is a forward-looking open-economy gap model, calibrated to represent the Indian case, for generating forecasts and risk assessment as well as conducting policy analysis. QPM incorporates several India-specific features like the importance of the agricultural sector and food prices in the inflation process; features of monetary policy transmission and implications of an endogenous credibility process for monetary policy formulation. The paper also describes key properties and historical decompositions of some important macroeconomic variables.

A Simple Macrofiscal Model for Policy Analysis: An Application to Morocco
A Simple Macrofiscal Model for Policy Analysis: An Application to Morocco

Author: Daniel Baksa

Publisher: International Monetary Fund

Published: 2021-07-16

Total Pages: 35

ISBN-13: 151359298X

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The paper describes a semistructural macrofiscal approach to simulating and forecasting macroeconomic policies. The model focuses on only a few variables that are consistent with the New Keynesian framework. Thanks to its simplicity, it facilitates an initial and intuitive understanding of monetary and fiscal policy transmission channels, and their main impact on economic activity. The model is adapted to Morocco and we demonstrate its application with an illustrative scenario of policy responses to a slower-than-expected recovery from the Covid-19 pandemic, under different monetary policy and exchange rate regimes.

Conditionality in Evolving Monetary Policy Regimes
Conditionality in Evolving Monetary Policy Regimes

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2014-05-03

Total Pages: 61

ISBN-13: 1498343694

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With single-digit inflation and substantial financial deepening, developing countries are adopting more flexible and forward-looking monetary policy frameworks and ascribing a greater role to policy interest rates and inflation objectives. While some countries have adopted formal inflation targeting regimes, others have developed frameworks with greater target flexibility to accommodate changing money demand, use of policy rates to signal the monetary policy stance, and implicit inflation targets.

World Economic Outlook, April 2016
World Economic Outlook, April 2016

Author: International Monetary Fund. Research Dept.

Publisher: International Monetary Fund

Published: 2016-04-12

Total Pages: 230

ISBN-13: 1498398588

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Major macroeconomic realignments are affecting prospects differentially across the world’s countries and regions. The April 2016 WEO examines the causes and implications of these realignments—including the slowdown and rebalancing in China, a further decline in commodity prices, a related slowdown in investment and trade, and declining capital flows to emerging market and developing economies—which are generating substantial uncertainty and affecting the outlook for the global economy. Additionally, analytical chapters examine the slowdown in capital flows to emerging market economies since their 2010 peak—its main characteristics, how it compares with past slowdowns, the factors that are driving it, and whether exchange rate flexibility has changed the dynamics of the capital inflow cycle—and assess whether product and labor market reforms can improve the economic outlook in advanced economies, looking at the recent evolution and scope for further reform, the channels through which reforms affect economic activity under strong versus weak economic conditions, reforms’ short- to medium-term macroeconomic effects, and sequencing of reforms and coordination with other policies to maximize their potential quantitative economic benefits. A special feature analyzes in depth the energy transition in an era of low fossil fuel prices.