Annual Report 2019
CENTRAL BANK OF
OBJECTIVES
THE REPUBLIC OF ARMENIA
4.
5.
6.
The economic model of the Russian Federation was re-
evaluated in the external-world-model framework. This
allows us to assess, predict and analyze the economy of the
Russian Federation more accurately.
An integrated database of short-term forecasts was created
to store inputted data into short-term forecast models.
Existing short-term forecast models were adapted to the
new database criteria, making it easy to use them to predict
any
variable in the database.
A new short-term forecast methodology the Dynamic
Factor Model was introduced, which is used in almost all
advanced central banks, making it possible to work with a
large number of explanatory variables.
The second aspect includes the following activities:
1.
2.
The Real Business Cycle and Dynamic Stochastic General
Equilibrium (DSGE) models for the Armenian economy
were built for a structural assessment of GDP potential. The
models are developed on the assumption of a path to
balanced growth, which allows input of time series of the
Republic of Armenia without additional intervention,
leaving all the information in the series intact. The models
were experimentally used in forecasts and have shown
better results than statistical models used for forecasts.
The DSGE model of the Armenian economy was built in
consideration of the firms' markups that change over time,
the state subsidies, which allows us to assess the impact of
structural reforms in the economy and changes in market
structure on inflation and other macroeconomic variables.
The model is non-linear, which makes it possible to estimate
the economy's new equilibrium shaped as a result of
various structural policies.
3. The real estate market was included in the DSGE model for
the Armenian economy, so assessing the cycle of
investment demand for real estate has become possible.
The model is developed on the assumption of a path to
balanced growth, which allows using the results of the
main model to predict the possible developments in the real
estate market in the forecast horizon.
ANNUAL
REPORT 2019
31
COOPERATION WITH I
NTERNATIONAL ORGANIZATIONS
INSTITUTIONAL
DEVELOPMENT
OTHER OBJECTIVES OF
THE BANK
MAINView entire presentation