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The Quarterly Projection Model of the SARB

Author

Listed:
  • Byron Botha
  • Shaun de Jager
  • Franz Ruch
  • Rudi Steinbach

Abstract

The macroeconomic modelling and forecasting process at the South African Reserve Bank makes use of a suite of models. This paper provides an update of the Quarterly Projection Model (QPM) a so-called gap model which has played an integral role in the suite since 2007. Details of the structure and functioning of the QPM model, with particular focus on the four most important gaps the output gap, real exchange rate gap, real interest rate gap, and inflation gap (or inflation from target) are provided. The model is then used to decompose these four gaps in order to tell a coherent story of South Africa's macroeconomic dynamics since the inception of inflation targeting. From the perspective of the policy maker, the QPM provides a tool that quantifies the consequences of its actions on the economy, while adequately highlighting the trade-offs that are faced in the process.

Suggested Citation

  • Byron Botha & Shaun de Jager & Franz Ruch & Rudi Steinbach, 2017. "The Quarterly Projection Model of the SARB," Working Papers 8000, South African Reserve Bank.
    • Handle: RePEc:rbz:wpaper:8000
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    File URL: http://www.resbank.co.za/content/dam/sarb/publications/working-papers/2017/8000/WP1701.pdf
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    Citations

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    Cited by:

    1. South African Reserve Bank, 2017. "Occasional Bulletin of Economic Notes 2017/03," Working Papers 8057, South African Reserve Bank.
    2. Byron Botha & Rulof Burger & Kevin Kotzé & Neil Rankin & Daan Steenkamp, 2023. "Big data forecasting of South African inflation," Empirical Economics, Springer, vol. 65(1), pages 149-188, July.
    3. Byron Botha & Franz Ruch & Rudi Steinbach, 2018. "Shortlived supply shocks to potential growth," Working Papers 8605, South African Reserve Bank.
    4. Luchelle Soobyah & Mulalo Mamburu & Nicola Viegi, 2023. "IsSouthAfricafallingintoafiscaldominantregime," Working Papers 11041, South African Reserve Bank.
    5. Dladla, Pholile & Malikane, Christopher, 2022. "Inflation dynamics in an emerging market: The case of South Africa," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 262-271.
    6. Eric Schaling & Kgotso Morema, 2022. "Optimalinterestrategapsforflexibleinflationtargeting," Working Papers 11037, South African Reserve Bank.
    7. Monique B. Reid & Pierre L. Siklos, 2022. "How Firms and Experts View The Phillips Curve: Evidence from Individual and Aggregate Data from South Africa," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(12), pages 3355-3376, September.
    8. Cobus Vermeulen, 2023. "The inherent uncertainties in output gap estimation a South African perspective," Working Papers 11051, South African Reserve Bank.
    9. Matthew Greenwood-Nimmo & Daan Steenkamp & Rossouw van Jaarsveld, 2022. "CaninformationonthedistributionofZARreturnsbeusedtoimproveSARBsZARforecasts," Working Papers 11035, South African Reserve Bank.
    10. Lutho Mbekeni & Andrew Phiri, 2019. "Can the South African Reserve Bank (SARB) protect the purchasing power of citizens? A new look at Fisher’s hypothesis," Working Papers 1906, Department of Economics, Nelson Mandela University, revised Sep 2019.
    11. Byron Botha & Eric Schaling, 2020. "Commodity Prices and Policy Stabilisation in South Africa," Working Papers 10225, South African Reserve Bank.
    12. Patrick Honohan & Athanasios Orphanides, 2022. "Monetary policy in South Africa, 2007-21," WIDER Working Paper Series wp-2022-29, World Institute for Development Economic Research (UNU-WIDER).
    13. Ekaterina Pirozhkova & Jeffrey Rakgalakane & Luchelle Soobyah & Rudi Steinbach, 2023. "Enhancing the Quarterly Projection Model," Working Papers 11048, South African Reserve Bank.
    14. Mr. Gee Hee Hong & Rahul Anand & Yaroslav Hul, 2019. "Achieving the Bank of Japan’s Inflation Target," IMF Working Papers 2019/229, International Monetary Fund.
    15. Ekaterina Pirozhkova & Jeffrey Rakgalakane & Luchelle Soobyah Rudi Steinbach, 2023. "EnhancingtheQuarterlyProjectionModel," Working Papers 11044, South African Reserve Bank.
    16. Byron Botha & Lauren Kuhn & Daan Steenkamp, 2020. "Is the Phillips curve framework still useful for understanding inflation dynamics in South Africa," Working Papers 10211, South African Reserve Bank.

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