Structural Quarterly Projection Model for Belarus
42 Pages Posted: 14 Jan 2019
Date Written: December 2018
Abstract
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.
Keywords: Belarus, Dollarization, Europe, Monetary policy, Quarterly Projection Model, Nominal Wages, Fiscal Impulse, Forecasting and Simulation, Monetary Policy (Targets, Instruments, and Effects), Quantitative Policy Modeling
JEL Classification: E47, E52, C54
Suggested Citation: Suggested Citation