Articles
An Open Economy Quarterly Projection Model for Sri Lanka
Authors:
Chandranath Amarasekara ,
Central Bank of Sri Lanka, LK
Rahul Anand,
Central Bank of Sri Lanka, LK
Kithsiri Ehelepola,
Central Bank of Sri Lanka, LK
Hemantha Ekanayake,
Central Bank of Sri Lanka, LK
Vishuddhi Jayawickrema,
Central Bank of Sri Lanka, LK
Sujeetha Jegajeevan,
Central Bank of Sri Lanka, LK
Csaba Kober,
Central Bank of Sri Lanka, LK
Tharindi Nugawela,
Central Bank of Sri Lanka, LK
Sergey Plotnikov,
Central Bank of Sri Lanka, LK
Adam Remo,
Central Bank of Sri Lanka, LK
Poongothai Venuganan,
Central Bank of Sri Lanka, LK
Rasika Yatigammana
Central Bank of Sri Lanka, LK
Abstract
This study documents a semi-structural model developed for Sri Lanka. This model, extended with a fiscal sector block, is expected to serve as a core forecasting model in the process of the Central Bank of Sri Lanka’s move towards flexible inflation targeting. The model includes a forward-looking endogenous interest rate and foreign exchange rate policy rules allowing for flexible change in policy behavior. It is a gap model that allows for simultaneous identification of business cycle position and long-term equilibrium. The model was first calibrated and then its data-fit was improved using Bayesian estimation technique with relatively tight priors.
How to Cite:
Amarasekara, C., Anand, R., Ehelepola, K., Ekanayake, H., Jayawickrema, V., Jegajeevan, S., Kober, C., Nugawela, T., Plotnikov, S., Remo, A., Venuganan, P. and Yatigammana, R., 2018. An Open Economy Quarterly Projection Model for Sri Lanka. Staff Studies, 48(1), pp.21–66. DOI: http://doi.org/10.4038/ss.v48i1.4708
Published on
30 Jun 2018.
Peer Reviewed
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