Page 36 - Azerbaijan State University of Economics

Hashim Al-Ali: An integrated macro-fiscal forecasting model and its application for
the Bangladesh economy

sensitivity analysis) for the economy, v) demining priority and leading growth sectors for the

optimal allocation of investment and other government expenditures, based on factors including
economic growth, job creation, and social benefits and outcomes, and vi) provide an analytical

framework for monitoring of the impact of the annual budget, medium-term budget framework
and any adopted development and public investment programme.

 The model and its different segments, sectors/sub-models, and equation systems, have been
numerically articulated and solved, for the Bangladesh economy, using a hybrid of different types

and sources of statistical data. In order to articulate various incorporated relationships and functions

within the model’s framework. Accordingly, the macro-fiscal model is designed to use and utilize all
available and valid data, in the format of; time series, cross-section, inter-industrial/inter-sectoral

input-output data, simulated data, borrowed data and/or experts assumptions, views and judgment, as

well as handling different policy scenarios alternatives.
 Most importantly, the macro-fiscal model, in its entirety and for all of its segments/sectors,

have been used as a viable analytical and knowledge topic for a thorough practical training
programmes. Such a programmes have been successfully delivered to selective MOF/FD/MEW

staff. Whereby, such modelling techniques, procedures and solution results, together with how to
interpret the outcomes and how be used in by the related divisions for preparation of MTMF and

MTBF, have been achieved. This is besides, that MEW staff have been trained and guided on the

required statistical data to apply and articulate the model’s modules and contents. Hence, data needed
to run the model, and on different variables and dimensions, have properly gathered, cleaned,

tabulated and normalized in values, prices, quantities, indexations, etc. Thereafter, all the stated and
demonstrated model’s mathematical/econometric and economic equations and functional

relationships, have been calibrated and numerically articulated, with the full participation of the
MOF/MEW staff. Thus, in doing so the staff would be able, from now onward, to assist in the

process of carrying out the sought after forecasting and projections of various parts and segments of

the model and the economy, as identified therein. These empirical solutions would eventually serve
in an effectively manner, and facilitate the MOF work, amongst others, on preparation of medium

term macroeconomic framework (MTMF), medium term budget framework (MTBF), public finance

management (PFM), investment programmes (PIP), and on all other related macro and sectoral
issues and strategies/policies affecting socio-economic development, macroeconomic stability and

fiscal sustainability of Bangladesh economy, at large, and for the future years to come.

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