Download Workshop on Macroeconomic Modelling in Asia and the Pacific 8-10 December 2015

Workshop on Macroeconomic
Modelling in Asia and the Pacific
8-10 December 2015
United Nations Conference Centre, MR-A
Bangkok, Thailand
Worksop on Macroeconomic Modelling in Asia and the Pacific
Setting the Stage
Sudip Ranjan Basu
Economist
8 December 2015
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Outline
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A brief review of macromodels
Initiatives at United Nations
Way forward
Structure of workshop
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Worksop on Macroeconomic Modelling in Asia and the Pacific
A brief review of macromodels
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Over 90 years of macromodels
“science is a public knowledge, reproducible knowledge”
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Lawrence Klein ‘ Brookings-SSRC model
project’ (1964-1969)
UNCTAD
Jan Tinbergen
(1968) UN Project LINK
Cowles
(1935)
(1969)
Commission/Foundations
Ragnar Frisch
(1932)
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(1932/1955)
UN SDGs
(2015-2030)
Sims CritiqueVAR+SVAR/GVAR (1980)
World bank-IMF-OECD Global
Multi-Country Models
(1990s)
DSGE-Kydland & Prescott
(1982)
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Klein CQM
(2002-2009)
Lucas Critique: Rational
expectation (1976)
GDP growth (%)
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UN MDG
(2000-2015)
Hendry
(1995)
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John Keynes
(1936)
Great Recession
(2007/2008)
Klein-Goldberger
(1955)
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Great Depression
(1929)
Oil Crisis
(1973)
Latin American Debt Crisis
(1980s)
Age of Klein
US Economic Recession
(1990/1991)
Asian Financial Crisis
(1997/1998)
0
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Source: Sudip Ranjan Basu, based on Historical Statistics of the World Economy: 1-2008 AD, (Copyright Angus Maddison)
Worksop on Macroeconomic Modelling in Asia and the Pacific
Over 90 years of macromodels
• Looking backward –reminiscing and looking
forward –dreaming
• Development of macromodel followed
economic theories and thoughts
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Objectives of macromodels
• Forecasting
• Policy simulation
• Lessons learnt
– Policy modelers need to be in touch with emerging policy priorities and constraints and
engaged in frequent dialogue with policymakers
– Important part of efficient policymaking-decision makers to act rationally by making
them fully aware of the repercussions and of the potential policy reforms to steer
economy –wide impact analysis
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Constructing macromodels
• Data requirements
• Technical framework
• Trained manpower
• Financial resources
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Types of macromodels
• Characteristics of models (eg, Keynesian type)
• Frequency –Annual + high-frequency
(quarterly and monthly)
• Size of models
• Sectors, and linkages
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Prototype macromodel from national to multi-country
• Comparison of the different time-series
• Check estimated coefficients
• External shocks
• Lessons learnt:
– One country model is at great variance with others, behavioral
equations have not been adequately estimated
– Some equations have to be estimated in different countries-often
has be re-specified and re-estimated several times
– Iterations leads to the formulation of general and robust equations
to simulate the working of economic relationships
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Initiatives at United Nations
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Models at UN system
• UN/UNCTAD Model, since 1968..
• UN/UNDESA Project LINK, since 1969..
• Regional UN models
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ECAFE/ESCAP
ECLAC
ECE
ECA
ESCWA
• World Bank-IMF-OECD
• Regional Development Banks
– Asian Development Bank
– Inter-American Development Bank
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Way forward
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Global and regional context
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Regional macroeconomic policy spillover
Trade policies, including protectionism
Financial sector linkages
Dependence on primary commodities
Income inequality
Energy sector & climate change
• 2030 Agenda for Sustainable Development
– Sustainable Development Goals
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Structure of workshop
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Worksop on Macroeconomic Modelling in Asia and the Pacific
Workshop-cum-Training
• Day 1, 8 December 2015
– Country Presentations
• Day 2, 9 December 2015
– Country Presentations
– Special Presentations
• Day 3, 10 December 2015
– Building national macromodels
• Way forward:
– Recommendations
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High-level Policy Dialogue on the Strategic Regional Partnership
for 2030 Agenda for Sustainable Development in Asia and the Pacific
Macroeconomic Policy and Development Division
Email: [email protected]
Tel: +6622881524
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