Structural Quarterly Projection Model for Belarus

Karel Musil, Mikhail Pranovich and Jan Vlcek

No 2018/254, IMF Working Papers from International Monetary Fund

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: WP; transmission mechanism; depreciation target; core inflation; nominal exchange rate depreciation; changes monetary policy strategy; Belarus; Quarterly Projection Model; Monetary Policy; Dollarization; Nominal Wages; Fiscal Impulse; depreciation shock; Exchange rates; Inflation; Inflation targeting; Output gap; Demand for money (search for similar items in EconPapers)
Pages: 41
Date: 2018-12-07
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Citations: View citations in EconPapers (3)

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