Quarterly Projection Model for the Bank of Ghana

Author/Editor:

Philip Abradu-Otoo ; Ivy Acquaye ; Abubakar Addy ; Nana Kwame Akosah ; James Attuquaye ; Simon Harvey ; Shalva Mkhatrishvili ; Zakari Mumuni ; Valeriu Nalban

Publication Date:

September 2, 2022

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

The paper describes the Quarterly Projection Model (QPM) that underlies the Bank of Ghana Forecasting and Policy Analysis System (FPAS). The New Keynesian semi-structural model incorporates the main features of the Ghanaian economy, transmission channels and policy framework, including an inflation targeting central bank and aggregate demand effects of fiscal policy. The shock propagation mechanisms embedded in the calibrated QPM demonstrate its theoretical consistency, while out-of-sample forecasting accuracy validates its empirical robustness. Another important part of the QPM is endogenous policy credibility, which may aggravate policy trade-offs in the model and make it more realistic for developing economies. Historical track record of real time policy analysis and medium-term forecasting conducted with the QPM – as a component of the broader FPAS analytical organization – establishes its critical role in supporting the Bank’s forward-looking monetary policy framework.

Series:

Working Paper No. 2022/169

Frequency:

regular

English

Publication Date:

September 2, 2022

ISBN/ISSN:

9798400218187/1018-5941

Stock No:

WPIEA2022169

Pages:

39

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