This paper presents a macroeconometric model of Rwanda. The model is constructed to analyze the macroeconomic effects of various policy interventions. It captures the supply constrained nature of the economy as well as its dependence on the external sector. The individual equations of the model are estimated in ARDL framework and a battery of tests are used to test the forecasting ability of the model. The model tracks the historical data very well with the desirable properties of low bias and variance proportions of the Theil’s Inequality coefficient. Two sets of simulation results are presented to show the model’s use for policy analysis. The results of the simulations are consistent with a priori theoretical expectations
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This paper has been announced in the following NEP Reports:- NEP-AFR-2013-07-15 (Africa)
- NEP-DEV-2013-07-15 (Development)
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