Template-Type: ReDIF-Paper 1.0
Author-Name: Byron Botha
Author-Name: Shaun de Jager
Author-Name: Franz Ruch
Author-Name: Rudi Steinbach 
Title: The Quarterly Projection Model of the SARB
Abstract: The macroeconomic modelling and forecasting process at the South African Reserve Bank makes use of a suite of models. This paper provides an update of the Quarterly Projection Model (QPM)  a so-called gap model  which has played an integral role in the suite since 2007. Details of the structure and functioning of the QPM model, with particular focus on the four most important gaps  the output gap, real exchange rate gap, real interest rate gap, and inflation gap (or inflation from target)  are provided. The model is then used to decompose these four gaps in order to tell a coherent story of South Africa's macroeconomic dynamics since the inception of inflation targeting. From the perspective of the policy maker, the QPM provides a tool that quantifies the consequences of its actions on the economy, while adequately highlighting the trade-offs that are faced in the process.
Creation-Date: 2017-09-26
File-URL: http://www.resbank.co.za/content/dam/sarb/publications/working-papers/2017/8000/WP1701.pdf
File-Format: application/pdf
File-Function: Revision
Number: 8000
Handle: RePEc:rbz:wpaper:8000