Development of a Quantitative Model for Macroeconomic Forecasting and Economic Simulations

This three-year project strengthened macroeconomic management capacity within the Ministry of Economy and Finance through the provision of technical assistance to the Direction for Economic Forecasting and Analysis for the development of a complete quantitative macroeconomic model that allows for estimating the countrys national wealth accumulation, as well as assessing the impact of economic and social policies on macroeconomic stability and on poverty reduction. The quantitative model developed throughout the project integrated two main components: a forecasting component based on an estimated macro econometric model which allows for performing short term projections, and a simulation component based on a Computable General Equilibrium model that was used for undertaking simulations of the effects of macroeconomic and social public policies on the structure of the economy (i.e. different sectors) and on economic agents.