Working Paper No. 05 of 2001 on Estimation Procedure and Estimated Results of the KIPPRA-Treasury Macro Model

Abstract

This Working Paper specifies and estimates the theoretical equations behind the KIPPRA-Treasury Macro Model (KTMM). The review heavily draws on previous macro models of Kenya, such as the Chakrabarti--or the macro economic policy model for Kenya, version II (MEPM)- and the medium- to long-term model, version 3 (MELT3). The two versions of each behavioural equation are estimated for prices (section 2), wage rate determination (section 3), wage employment (section 4), private investment (section 5), imports (section 6), employment in the informal sector (section 7), private consumption (section 8), export supply (section 9), money demand and interest rate (section 10) and exchange rate determination (section 11).