A macro-econometric model for Lesotho. DIMMoL Workshop: Database management, modelling and forecasts Igor Lebrun Maseru, Lesotho 30 November 2007. A refresher on macro-econometric models. What is a structural model?.
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DIMMoL Workshop: Database management, modelling and forecasts
30 November 2007
Also referred to as a macro-econometric model
Although they share common features, different models can produce very different results!
In practise these four stages are interdependent and require going back and forth.
What follows draws largely on background papers produced by NUL
The primary objectives of the macro-model in this project:
The economy in Lesotho has been driven by very specific - mainly supply-side - factors:
difficult (impossible?) to disentangle the cycle from the trend
difficult to construct a relevant indicator for Lesotho’s export markets
The proposed strategy consists of considering the following items as exogenous variables for the macro model:
and to rely on:
This means that indirectly the scenario would entail assumptions on the evolution of the South African and world economy
Net primary income
Net current transfers
Primary industry = A + B
Secondary industry = MT + MO + E + C
Tertiary industry = SP + SG
Private sector T = A + B + MT + MO + E + C + SP
Total TT= T + G
How to compute TXO (implicit tax rate or MTFF?) and FSIMO remains to be determined
In current prices:
In real terms (specific NA definition):
Influenced solely by CPI in South Africa or also internal factors (link with monetary policy?)
Clearly problems of data availability!
Obviously we need the revised national accounts’ series!
On top of this prerequisite:
All required data should be put together in a format suitable for importing in Eviews
12 December 2007
But: these three points can be pursued in parallel, model can be built piece by piece as long as overall structure remains coherent