South African Model Extension

The NIGEM model incorporates key macroeconomic relationships. Specific country models feature sticky prices, rational and adaptive expectations, Taylor rule, trade, and long-run fiscal solvency. Furthermore, NiGEM provides the ability to integrate user changes, and amend parameters, provides a historical and forecast database, specific country forecasts, scenario analysis, and stochastic simulations. The aims of the project are twofold. The first goal is extend the South African Model from a reduced country model to a full country model. The main differences between full country models and reduced country models are: full country models have a fully developed demand side whilst reduced country models have an aggregated demand side; full country models include a fully specified labour market, which reduced country models exclude. Expanding the NiGEM South Africa country model will, therefore, improve its policy analysis to a global level. The second goal is to incorporate a banking sector in the South African model.