DESA macroeconomic modelling tool and simulations for SDGs - - PowerPoint PPT Presentation

β–Ά
desa macroeconomic modelling tool and simulations for sdgs
SMART_READER_LITE
LIVE PREVIEW

DESA macroeconomic modelling tool and simulations for SDGs - - PowerPoint PPT Presentation

Aug 21, 2022 321 likes β€’555 views

DESA macroeconomic modelling tool and simulations for SDGs Nur-Sultan, Kazakhstan September 2019 Namsuk Kim UN DESA Outline 1. Modeling tool and methodology 2. Simulations 3. Modelling capacity building Modelling tool and methodology

slide-1
SLIDE 1

DESA macroeconomic modelling tool and simulations for SDGs

Nur-Sultan, Kazakhstan September 2019 Namsuk Kim UN DESA

slide-2
SLIDE 2

Outline

1. Modeling tool and methodology 2. Simulations 3. Modelling capacity building

slide-3
SLIDE 3

Modelling tool and methodology

  • Expanded World Economic Forecasting Model

(WEFM-e)

  • Asses impact of BRI on economic development of

selected countries

  • Simulate impact of investments in Infrastructure on

income growth, labor market, fiscal sustainability, poverty reduction and so on

slide-4
SLIDE 4

World Economic Forecasting Model

  • Started linking country models in 1970s (LINK).
  • Since 2005, integrated modelling tool covering 176

countries.

  • Multi-country forecasting model
  • Error-correction principle
  • Supply, Demand, Monetary sides
slide-5
SLIDE 5

UN World Economic Forecasting Model

Potential

  • utput

Labor supply Exogenous total factor productivity Export growth Labor participation Population Output Government consumption Investment Personal consumption Exports and imports Output gap Inflation Exchange rate against USD US inflation Shares

  • n
  • utput

Interest rates Output per capita

slide-6
SLIDE 6

WEFM - production side

  • Potential output growth depends on Trend growth of the Total Factor

Productivity (TFP), change in the labor supply (labor force projection) and growth

  • f exports
  • Trend growth of TFP depends on TFP growth itself with an error term

guarantying that labor productivity does not systematically deviates from the trend growth of TFP

  • TFP growth is kept constant at 2%, 3% or 4% depending on the level of country

development

π‘ˆπΊπ‘„ = πœ”π‘ˆπΊπ‘„ + 1 βˆ’ πœ” π‘ˆπΊπ‘„ + (1 βˆ’ πœ”) 1 3 𝑍𝐹𝑆 𝑀𝑂𝑂 𝑍𝐹𝑆 𝑀𝑂𝑂 βˆ’ π‘ˆπΊπ‘„

π‘πΊπ‘ˆ = 𝛽[𝑀𝐺𝑂 + π‘ˆπΊπ‘„] + 1 βˆ’ 𝛽 π‘Œπ‘ˆπ‘†

slide-7
SLIDE 7

Changes in WEFM-e

  • Create simplified (reduced-form) version of complex

non-linear relationships for

  • infrastructure investment and education level in

production

  • labor participation based on GDP per capita and

education level

  • Poverty reduction
  • Consumption and investment behavior in relation to

expected growth and the real interest rate

  • Government debt accumulation and its impact on the

country risk premium, real interest rate and the exchange rate with the back loop in private consumption and investment

slide-8
SLIDE 8

Outline

1. Modeling tool and methodology 2. Simulations 3. Modelling capacity building

slide-9
SLIDE 9

Simulations for Kazakhstan

  • BRI related investments amounted $4.4 billion

during 2012 – 2020.

  • Medium period projection until 2023
slide-10
SLIDE 10

0% 3% 6% 9% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Investment growth

Original Modified

slide-11
SLIDE 11
  • 5%

0% 5% 10% 15% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Investment growth (Modified Model)

Infrastructure Inv Private Gvt

slide-12
SLIDE 12

1% 3% 5% 2012 2014 2016 2018 2020 2022

Trend productivity growth

Original Modified

slide-13
SLIDE 13

1% 4% 7% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Potential output growth

Original Modified

slide-14
SLIDE 14

0% 3% 6% 9% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

GDP growth

Original Modified

slide-15
SLIDE 15

40 50 60 70 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Labor force participation

Modified_Female Modified_Male Modified Original

slide-16
SLIDE 16
  • 8
  • 4

4 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Fiscal balance

Original Modified

slide-17
SLIDE 17

10 20 30 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Deb-to-GDP ratio

Original Modified

slide-18
SLIDE 18

220000 240000 260000 280000 300000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

CO2 emission (kt)

slide-19
SLIDE 19

BRI related investment (SDG 9, 11) …

  • Limited impact in labor force participation and jobs (SDG 8)
  • Limited impact on decreasing the gender gap (SDG 5, 8)
  • Boosts the productivity growth (SDG 4, 8, 17)
  • Leads to a faster output growth (SDG 8)
  • Gov deficit and debt manageable (SDG 17)
  • Overall, the positibe impacts on economic growth, cautions
  • n environment and social indicators.
slide-20
SLIDE 20

Future work on WEFM-e

  • Data
  • Calibrations
  • Region-integrated simulations

+ Qualitative studies

slide-21
SLIDE 21

Outline

1. Modeling tool and methodology 2. Simulations 3. Modelling capacity building

slide-22
SLIDE 22

Planned project activities

  • Online access to simulation scenarios at www.brisdgs.org
  • Interim report (mid 2019), and final report (mid 2020)
  • Regional workshops – Bangkok (Sep 2019), Tbilisi (Oct 2019),

China (early 2020)

  • National workshops in other countries - Kyrgyzstan,

Azerbaijan, … (2019-20).

  • In-depth training course on modelling tools including WEFM-

e if requested

slide-23
SLIDE 23

Contact: kimnamsuk@un.org