A Simple Macrofiscal Model for Policy Analysis: An Application to Cambodia

September 25, 2020

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The paper describes a semistructural macrofiscal approach to simulating and forecasting macroeconomic policies. Our canonical model is adapted to Cambodia and we demonstrate its application with an illustrative scenario of macroeconomic effects of the Covid-19 pandemic. Complemented with near-term forecasting tools and expert judgment, the dynamics of the model helps to inform policymakers about medium-term transmission channels and thus guide policy advice.

Subject: Exchange rates, Financial services, Foreign exchange, National accounts, Output gap, Production, Real exchange rates, Real interest rates, Return on investment

Keywords: aggregate supply, business cycle, Cambodia, central bank, country risk, exchange rate regime, Exchange rates, Fiscal Multiplier, Fiscal Policy, Global, NBC monetary policy option, nominal exchange rate, Output gap, potential GDP, reaction function, Real exchange rates, Real interest rates, Return on investment, transmission mechanism, WP

Pages:
37
Volume:
2020
DOI:
https://doi.org/10.5089/9781513556857.001
Issue:
202
Series:
Working Paper No. 2020/202
Stock No:
WPIEA2020202
ISBN:
9781513556857
ISSN:
1018-5941

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