The Core of a Macro-economic Model for Estonia

Olivier Basdevant () and Ülo Kaasik ()

No 2002-06, Bank of Estonia Working Papers from Bank of Estonia

Abstract: This article presents a macro-econometric model for Estonia currently developed at the Bank of Estonia. It is based on a basic macro-economic framework that integrates both supply and demand side components. With this model we analyse the policy that should be implemented to maintain sustainable growth. The main emphasis is on the need to continue tough fiscal policy in order to maintain public deficit, as well as to avoid inflationary pressures and keep Estonia attractive to foreign investors.

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Date: 2002-10-20, Revised 2002-10-13

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