South African Model Extension

The aim of the project is to extend the current reduced version of the South African model in NiGEM to a full country model. Expanding the NiGEM South African country model will improve its policy analysis to a global level and improve its ability to track the impact of a wider range of policy impacts. As such, the model will now be able to reach new policy areas such as macroprudential and monetary policy coordination

Project Icon Project Status
Project Icon Funder
Funder Image

Summary & aims

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.


The methodological approach involves identifying missing variables and creating a model template; sourcing data for the new variables; re-estimating equations; creating forecast base; model testing and calibration; final incorporation into main NiGEM model.

Principal Investigator

South African Model Extension
Principal Economist


Urvish Patel
Associate Economist
Joanna Nowinska
Assistant Economist


Ian Hurst
Associate Research Director for Model Development