The World Bank Macro-Fiscal Model Technical Description

41 Pages Posted: 7 Aug 2019

See all articles by Andrew Burns

Andrew Burns

World Bank

Benoit Philippe Marcel Campagne

Joint Bank-Fund Library (World Bank/IMF)

Charl Jooste

World Bank

David Andrew Stephan

World Bank

Thi Thanh Bui

World Bank

Date Written: August 6, 2019

Abstract

This paper outlines the structure and economic foundation of the World Bank's macroeconomic and fiscal model (MFMod). MFMod consists of individual country models for 181 countries. The models are used by country economists within the World Bank's Macroeconomics, Trade and Investment Global Practice to (i) generate country forecasts and (ii) simulate various policies. Each model has a similar structure and functional form, with variation reflecting data availability and economic specialization (notably for oil exporters). Although the functional forms are similar, the parameters are country specific and estimated at the country level. Forecasts across countries are live-linked, with the export market growth of each country calculated as a trade-weighted average of imports of each of its trading partners. Remittance inflows and outflows are balanced across countries through a similar mechanism. Other cross-country linkages come through the real effective exchange rate and export and import prices, which are a function of world commodity prices and local cost considerations.

Keywords: Inflation, Macroeconomic Management, Employment and Unemployment

Suggested Citation

Burns, Andrew and Campagne, Benoit Philippe Marcel and Jooste, Charl and Stephan, David Andrew and Bui, Thi Thanh, The World Bank Macro-Fiscal Model Technical Description (August 6, 2019). World Bank Policy Research Working Paper No. 8965. Available at SSRN: https://ssrn.com/abstract=3433472

Andrew Burns (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Benoit Philippe Marcel Campagne

Joint Bank-Fund Library (World Bank/IMF)

United States

Charl Jooste

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

David Andrew Stephan

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Thi Thanh Bui

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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