Government develops model for macroeconomic analysis
The Ministry of Finance and Economic Planning (MOFEP) with support from German Federal Ministry of Development Cooperation, has developed a macroeconomic model to enhance economic policy analysis.
The model titled: “A Structural Macroeconomic Model of the Ghanaian Economy for Policy Scenario Analysis and Macroeconomic Forecasting” has 97 variables of which 72 were endogenous while the remaining 25 were exogenous.
Dr Said Boakye, Technical Advisor on Macroeconomic at MOFEP, and author of the model said the country’s macro economy required the use of more sophisticated and comprehensive analytic models that connected all the major sectors of the economy.
He announced this at the launch of the Model to solicit comments and disseminate information about it to stakeholders in Accra on Wednesday.
Dr Boakye said the model could be used for policy analysis and macroeconomic forecasting to enhance Ghana’s budgeting and planning process in the short to medium term.
“Building of the model was motivated by the degree of modernisation and complexity of Ghana’s economy that has increased because of the structural and institutional transformation of the economy….,” he said.
He noted that use of oversimplified analytic models which were usually designed for sectoral analysis as a means of macroeconomic management in the country was not enough.
This implies that, using the model, policy makers could have prior knowledge in quite a comprehensive manner, the estimated effects of the different sets of policy alternatives before policy choice and decisions are made.
“It could also provide more meaning to the medium-term expenditure framework budgeting system by helping to generate a more scientific manner, medium-term macroeconomic framework and resources envelopes after analysing the medium-term effects of the policy alternatives,” Dr Boakye added.
Dr John Kwakye, Senior Economist at the Institute of Economic Affairs commended the author for the initiative and expressed the hope that the model would be useful in policy analysis and macroeconomic forecasting.
Source: GNA