966
Serial number: 05/2013
Author(s): Kh. Abdullayev, S. Huseynov
Language: Azerbaijani
Date: 2013
Abstract: The recent experiences demonstrate that the quantitative economic modelling is considered to be the most advanced tool in the realm of the modern economic research. Therefore, the present research is devoted to the study of modeling practices in the monetary policy formulation conducted by central banks. The sophisticated economic modeling framework substantially contributes to the rationality of monetary policy formulation practices. It is inevitable that individual intuitions of policymakers based on rich experience form the initial basis to the formulation of monetary policies.
But the quantitative models, are meant to be important analytical tools in the study of existing economic linkages, which assist the policy-makers in doing better economic forecasting. Currently, International Monetary Fund actively uses Dynamic Stochastic General Equilibrium Model to conduct economic forecasting.
The quality of mathematical models is determined by their adequacy to meet coherently individual characteristics of existing economic linkages. However, the coverage and quality of economic statistics and information directly affect the results of the quantitative models. Another important factor is that mathematical models are to be adaptive in terms incorporating structural changes in economy
Key words: Research capacity at central banking, research & development
JEL classification: C02
