- July 28, 2021
- Posted by: admin
- Category: Current News
As an economy evolves, the process of conducting sound macroeconomic policy analysis becomes challenging. This requires Central Banks and Ministries of Finance/Planning and Development in the MEFMI region to develop requisite skills and comprehensive operational macroeconomic models that can address these changes. The small-scale macro-econometric model, which is widely used by most economic institutions to support the design, analysis and implementation of most economic policies, is very useful in this regard. The model, which is largely based on the Eviews econometric software, is skill intensive and produces short-to-medium demand-side GDP projections. The output is also used as input in other tools such as the IMF/WB debt sustainability framework, Financial Programming and Policy Frameworks, Medium Term Fiscal Frameworks and the near-term forecasts of the Forecasting and Policy Analysis Systems.
It is in this regard that MEFMI conducted an e-learning course on introduction to macro-economic modelling and forecasting from 10 to 28 May, 2021 to strengthen the capacity for macroeconomic analysis in the region. The course exposed the participants to various macro-econometric models, including the EViews econometric software. Practical demonstrations of data analysis, and data cleaning; remedial measures of addressing data gaps and seasonal adjustments of macroeconomic data were also conducted. The participants were also shown how to establish a cointegration relationship and develop a macro-econometric model for in-sample and out-of-sample forecasting. Further, the participants were taken through various model diagnostics tests such as the heteroscedasticity, normality, serial correlation, linearity and the omission of relevant variables, as well as the redundant variables tests. The final week focused on the atheoretical VAR and VEC models. Specific focus was on how to; i) build and estimate a VAR and VEC model in Eviews; ii) model diagnostics iii) undertake granger causality tests, impulse responses and variance decompositions and iv) forecast with a VAR and VEC model.
The course was attended by 57 participants from nine (9) MEFMI member countries, namely Angola, Botswana, Eswatini, Lesotho, Malawi, Tanzania, Uganda, Zambia and Zimbabwe. The participants were mentored by a resource team which included Dr. Austin Chiumia (MEFMI Accredited Fellow, Reserve Bank of Malawi); Mr. Wilson Assimwe (MEFMI Graduate Fellow, Ministry of Finance, Planning and Economic Development, Uganda); Mr. Fernando Cambundo (Independent Consultant) and Dr. Sayed Timuno (MEFMI Staff)
Looking ahead, countries are expected to use the knowledge gained from the course to improve their analysis of economic policy and contribute towards prudent macroeconomic management in the region.