Framework for macroeconomic analysis applied to Kenya

Colin A. Bruce and David Ndii

No 767, Policy Research Working Paper Series from The World Bank

Abstract: The authors develop a macroeconomic model for Kenya that projects detailed national, fiscal, monetary, and private sector accounts, and the balance of payments. With no changes in its logical structure, the model also calculates the magnitude of policy adjustments that would eliminate external and internal imbalances. Their approach emphasizes transparency and user-friendliness, which they achieve in two ways. First, historical data - the basis for projections, and second, key behavioral assumptions and targets are entered in a clearly designated worksheet. This worksheet also accommodates coefficients for the import and export price and income elasticities by major commodity groups; the interest and income elasticities of private investment; and the impact of inflation, income growth, and changes in interest rates on the demand for currency, demand deposits, and time deposits. The targets include domestic inflation and sectoral growth rates.

Keywords: Economic Theory&Research; Environmental Economics&Policies; Economic Stabilization; Banks&Banking Reform; Macroeconomic Management (search for similar items in EconPapers)
Date: 1991-09-30
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