Title: A Small-Size Macroeconometric Model for Pakistan Economy
Abstract: This paper attempts to develop a small size macro-econometric model for Pakistan to analyze the effects of monetary policy on key macro variables through forecasting and simulations. The model comprises of 17 equations, out of which 11 are behavioral equations while the rest are either identities or definitional equations. OLS method is used to estimate the behavioral equations by using annual data from FY73-FY06. The paper analyzes results of policy simulations to quantify the impact of shocks to various exogenous variables.