An Extended Quarterly Projection Model for the Central Bank of Jordan

By Adel Al-Sharkas, Nedal Al-Azzam, Sarah AlTalafha, Rasha Abu Shawish, Ahmad Shalein, Auday Rawwaqah, Amany Al-Rawashdeh, Daniel Baksa, Philippe D Karam, Jan Vlcek

August 25, 2023

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Adel Al-Sharkas, Nedal Al-Azzam, Sarah AlTalafha, Rasha Abu Shawish, Ahmad Shalein, Auday Rawwaqah, Amany Al-Rawashdeh, Daniel Baksa, Philippe D Karam, and Jan Vlcek. An Extended Quarterly Projection Model for the Central Bank of Jordan, (USA: International Monetary Fund, 2023) accessed September 26, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The Central Bank of Jordan (CBJ) has developed a Forecasting and Policy Analysis System (FPAS) to serve as a reliable analytical framework for macroeconomic analysis, forecasting and decision-making under a pegged exchange rate regime. At the heart of the FPAS is the CBJ’s extended Jordan Analysis Model (JAM2.0). The model captures the monetary transmission mechanism and provides a consistent monetary policy framework that uses the exchange rate as an effective nominal anchor. This paper outlines the structure and properties of JAM2.0 and emphasizes the enhanced interplay and tradeoffs among monetary, fiscal, and foreign exchange management policies. Simulation and forecasting exercises demonstrate JAM2.0’s ability to match key stylized facts of the Jordanian economy, produce accurate forecasts of important macroeconomic variables, and explain the critical relationships among policies.

Subject: Exchange rate arrangements, Foreign exchange, Inflation, Output gap, Prices, Production, Public debt, Real exchange rates

Keywords: Exchange rate arrangements, Forecasting exercise, FX reserve management, Global, Headline inflation, Inflation, Model forecasting, Output gap, Policy analysis, Real exchange rates

Publication Details

Pages:

84
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/172
Stock No:

WPIEA2023172
ISBN:

9798400252716
ISSN:

1018-5941

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