Introducing a Semi-Structural Macroeconomic Model for Rwanda

 
Author/Editor: Luisa Charry ; Pranav Gupta ; Vimal Thakoor
 
Publication Date: August 22, 2014
 
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Summary: We develop a simple semistructural model for the Rwandan economy to better understand the monetary policy transmission mechanism. A key feature of the model is the introduction of a modified uncovered interest parity condition to capture key structural features of Rwanda’s economy and policy framework, such as the limited degree of capital mobility. A filtration of the observed data through the model allows us to illustrate the contribution of various factors to inflation dynamics and its deviations from the inflation target. Our results, consistent with evidence for other countries in the region, suggest that food and oil prices as well as the exchange rate have accounted for the bulk of inflation dynamics in Rwanda.
 
Series: Working Paper No. 14/159
Subject(s): Monetary transmission mechanism | Rwanda | Inflation targeting | Monetary policy | Economic models

 
English
Publication Date: August 22, 2014
ISBN/ISSN: 9781498398343/1018-5941 Format: Paper
Stock No: WPIEA2014159 Pages: 37
Price:
US$18.00 (Academic Rate:
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