## September 2022

## Source details

**Canonical URL:** [September 2022](https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/sep2022.pdf)

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### Ghana Forecasting and Policy Analysis System (FPAS) TA
- The IMF-FCDO team supported the Bank of Ghana (BoG) to develop a Forecasting and Policy Analysis System (FPAS).
- An in-person ICD TA mission during July 4-15, 2022 focused on extending the Quarterly Projection Model (QPM) used by the BoG for Monetary Policy Committee (MPC) policy analysis and forecasts.
- The TA team helped decompose model-based GDP into agriculture, oil, and non-agriculture-non-oil value added to:
  - better capture demand-side vs. supply-side inflationary pressures;
  - more accurately assess fundamental drivers of price dynamics in Ghana.
- Using the extended modeling environment, the TA mission assisted BoG staff in preparing real-time analysis and forecasts for the July 2022 MPC sessions amidst a very challenging macroeconomic environment, with inflation rates close to 30%.

### Conferences and Seminars
- 2022 International Conference on Development Economics (June 30–July 1, 2022)
  - Organized jointly with the French Association of Development Economics and others; hosted by CERDI, Clermont-Auvergne University, France.
  - Topics: migration, climate change, growth, poverty, monetary policy, international trade, inequality, and fiscal policy.
  - Keynote speakers: Rabah Arezki, Jean-Marie Baland, and Ana María Ibáñez.
  - More than fifteen participants funded by IMF-FCDO from LICs presented.
- Conference on Fragile States (June 6-7, 2022)
  - Organized by the IMF under the IMF-FCDO partnership to explore the nexus between fragility, conflict, and macroeconomic policy.
  - Gathered FCS policymakers, academics, and practitioners to reflect on macroeconomic policy’s role in Fragile and Conflict-Affected Situations (FCS) and the Fund’s stepped-up support.
  - Discussions highlighted insights from Macroeconomic Policy in Fragile States (OUP, 2021) and focused on fiscal, monetary, and financial sector policies to reverse state fragility and build state capacity.
- Monetary Policy Frameworks—An Index and New Evidence (June 30, 2022 seminar; July 28, 2022 CCAMTAC seminar)
  - Seminar at the IMF launched the Monetary Policy Frameworks: IAPOC toolkit and disseminated the IAPOC Index and underlying methodology from the February Working Paper.
  - D. Filiz Ünsal demonstrated how to download and use data from the website; panel moderated by David Wessel with Alan Blinder, Richard Clarida, and D. Filiz Ünsal.
  - July 28, 2022 presentation for CCAMTAC covered IAPOC intuition, methodology, data collection, and main findings for the CCA; discussants included Haykaz Igityan and Azat Kozubekov.

### Working Papers and Research Findings
- Income Convergence Or Divergence in The Aftermath of the COVID-19 Shock? (Working Paper by Mariya Brussevich, Shihui Liu, and Chris Papageorgiou)
  - Extends Deaton (2021) to explore income convergence during post-crisis recovery in 2021-2024.
  - Documents per-capita income divergence during the period of post-shock recovery, with countries at the bottom of the income distribution falling significantly behind.
  - Findings indicate that higher COVID-19 vaccination rates and targeted virus containment measures are associated with faster recovery in per-capita incomes in the medium term.
  - Evidence on the effectiveness of economic support policies (including fiscal and monetary policies) for reducing cross-country income inequality is mixed, especially for developing countries.
- Staple Food Prices in Sub-Saharan Africa: An Empirical Assessment (Working Paper by Cedric Okou, John Spray, and Filiz Unsal)
  - Analyzes domestic and external drivers of local staple food prices using domestic market prices for the five most consumed staple foods from 15 countries.
  - Documents high vulnerability of Sub-Saharan African countries to global food prices with the pass-through from global to local food prices estimated close to unity for highly imported staples.
  - Domestic factors can mitigate vulnerabilities: staple food price inflation is lower in countries with greater local production and among products with lower consumption shares.
  - Adverse shocks (natural disasters and wars) produce sharp real increases in staple food prices.
  - Economic policy can lower food price inflation: strength of monetary policy and fiscal frameworks, overall economic environment, and transport constraints in geographically challenged areas account for substantial cross-country differences in staple food prices.
  - Outcomes from the working paper will be featured in an IMF departmental paper and presented during the October 2022 IMF-World Bank Annual meetings.

### External Sector Impact of Disaster Shocks
- DIGNAD model analysis (Marto, Papageorgiou, and Kluyev, 2018) featured in Box 1.3 of Chapter 1 of the IMF’s 2022 External Sector Report (published August 2022).
- Model and empirical analysis show natural disasters tend to be followed by large current account deficits.
- Model-based results indicate that impacts of natural disasters on both GDP and the current account can be mitigated by ex-ante investments in adaptation.
- A contingency fund can reduce reliance on external debt for reconstruction and help smooth the recovery.

### Adapting to Climate Change: Macro Framework and Tools
- Seminar presentation “Adapting to Climate Change: A Macro Framework” by Vu T. Chau and Filiz D. Unsal (IMF Research Development-Macroeconomic Seminar Series, June 27, 2022).
- Introduced a novel macroeconomic model to analyze impacts of climate physical and transition risks on macroeconomic stability and to study optimal policies for developing and low-income countries.
- The analytical model will be developed into a user-friendly climate analysis interface as part of an interdepartmental project that won the first prize of the IMF Climate Innovation Challenge 2022.

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_Source: https://www.imf.org/-/media/files/topics/lics/macro-research-for-development/newsletters/sep2022.pdf_