Vol. 9 No. 1 (2022)

A Simple Macro-Fiscal Model for Policy Analysis: An Application to Cambodia

Daniel Baksa
International Monetary Fund, USA.
Ales Bulir
International Monetary Fund, USA.
Dyna Heng
International Monetary Fund, USA.

Published 2022-02-28

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  • Business cycle, Fiscal policy, Cambodia, Forecasting, Simulation, Debt management.

How to Cite

Baksa, D. ., Bulir, A. ., & Heng, D. . (2022). A Simple Macro-Fiscal Model for Policy Analysis: An Application to Cambodia. Asian Journal of Economics and Empirical Research, 9(1), 21–37. https://doi.org/10.20448/ajeer.v9i1.3733


Macroeconomic management in many developing countries is often heavily dependent on fiscal policies. This paper develops a semi-structural macro-fiscal model for simulating and forecasting macroeconomic policies in Cambodia. The model is calibrated to capture key characteristics of Cambodia’s economy and serves as a tool for scenario analysis. We demonstrate its application with an illustrative scenario of the macroeconomic effects of the Covid-19 pandemic. The model’s results conform with past empirical analyses of the Cambodian economy and generate intuitive and easy-to-understand policy scenarios. Complemented with near-term forecasting tools and expert judgment, the dynamics of the model help to inform policymakers about medium-term transmission channels and thus guide policy advice. In particular, the results could serve as an input for the country’s medium-term fiscal framework and debt sustainability analysis.


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