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Quarterly Projection Model for the Bank of Ghana
Author:
Philip Abradu-Otoo
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Ivy Acquaye
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Abubakar Addy
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Nana Kwame Akosah
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James Attuquaye
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Simon Harvey
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Shalva Mkhatrishvili https://isni.org/isni/0000000404811396 International Monetary Fund

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Zakari Mumuni
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Valeriu Nalban https://isni.org/isni/0000000404811396 International Monetary Fund

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Series:
IMF Working Papers
Volume/Issue:
Volume 2022: Issue 169
Language:
English
Publication Date:
02 Sep 2022
DOI:
https://doi.org/10.5089/9798400218187.001
ISBN:
9798400220142
ISSN:
1018-5941
Pages:
39
Keywords:
Ghana; Forecasting and Policy Analysis; Quarterly Projection Model; Monetary Policy; Transmission Mechanism; out-of-sample forecasting accuracy; D. monetary policy credibility channel; projection model; impulse response; policy analysis; Inflation; Output gap; Inflation targeting; Exchange rates; Central bank policy rate; Global
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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.
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The paper describes the Quarterly Projection Model (QPM) that underlies the Bank of Ghana Forecasting and Policy Analysis System (FPAS). The New Keynesian semi-structural model incorporates the main features of the Ghanaian economy, transmission channels and policy framework, including an inflation targeting central bank and aggregate demand effects of fiscal policy. The shock propagation mechanisms embedded in the calibrated QPM demonstrate its theoretical consistency, while out-of-sample forecasting accuracy validates its empirical robustness. Another important part of the QPM is endogenous policy credibility, which may aggravate policy trade-offs in the model and make it more realistic for developing economies. Historical track record of real time policy analysis and medium-term forecasting conducted with the QPM – as a component of the broader FPAS analytical organization – establishes its critical role in supporting the Bank’s forward-looking monetary policy framework.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund