Modelling the Macroeconomic Policy Framework for an Emerging Market Economy

Green, Christopher J.; Murinde, Victor

Abstract

We propose a macroeconomic model suitable for policy analysis for an emerging market economy (EME). The model neither uncritically applies conventional macro theory nor departs altogether from orthodoxy; rather, it modifies the conventional framework and captures the distinctive features of EMEs. The structure of the model is reduced to three equations: aggregate demand, aggregate supply and the balance of payments. We use these directly to derive policy multipliers. The model innovatively encompasses competing hypotheses from the neoclassical and new-structuralist paradigms, and the three-equation format is particularly convenient for simulation experiments and other empirical work for EMEs with finite macroeconomic series.

Citation

Green, C. J., & Murinde, V. (1998). Modelling the Macroeconomic Policy Framework for an Emerging Market Economy. The Manchester School, 66(3), 302-330. https://doi.org/10.1111/1467-9957.00103

• Journal Article Type: Article
• Online Publication Date: Dec 16, 2002
• Publication Date: Jun 1, 1998
• Deposit Date: May 21, 2017
• Journal: The Manchester School
• Print ISSN: 1463-6786
• Electronic ISSN: 1467-9957
• Publisher: Wiley
• Peer Reviewed: Peer Reviewed
• Volume: 66
• Issue: 3
• Pages: 302-330
• DOI: https://doi.org/10.1111/1467-9957.00103