Course Overview

This advanced program equips central bank economists, macro‑modelers, and policy analysts with the tools and techniques required to design, estimate, and apply model‑based frameworks for monetary policy analysis and forecasting. It aligns with World Bank, IMF, and BIS approaches to macroeconomic modelling, inflation forecasting, and policy simulation.

Participants will learn how to use structural and semi‑structural models, build forecasting systems, analyze policy trade‑offs, and support Monetary Policy Committee (MPC) decision‑making.

2. Learning Objectives

Participants will be able to:

• Understand the role of macroeconomic models in monetary policy formulation.

• Build and interpret structural and semi‑structural macroeconomic models.

• Apply forecasting tools for inflation, output, interest rates, and exchange rates.

• Conduct scenario analysis and policy simulations.

• Use model‑based evidence to support MPC deliberations.

• Evaluate the impact of shocks and policy interventions on the economy.

• Produce model‑based policy briefs aligned with World Bank and IMF standards.

3. Target Audience

• Central bank economists and monetary policy analysts

• Macroeconomic modelling and forecasting units

• Ministry of Finance macro‑fiscal teams

• Financial sector regulators

• World Bank–funded project teams

• Researchers and academics in macroeconomics

• Economic advisors and policy consultants

4. Detailed Course Outline

Module 1: Introduction to Model‑Based Monetary Policy

• Why central banks use models

• World Bank and IMF approaches to macro‑modelling

• Types of models: structural, semi‑structural, DSGE, VAR, hybrid models

• Role of models in inflation targeting and policy analysis

• Case studies from emerging and developing economies

Module 2: Macroeconomic Frameworks for Policy Analysis

• The four‑sector macroeconomic framework

• Output gaps, potential output, and trend growth

• Inflation dynamics and Phillips curve modelling

• Monetary policy reaction functions (Taylor rule, augmented rules)

• Exchange rate and external sector linkages

Module 3: Semi‑Structural Models for Forecasting

• Gap models (IS curve, Phillips curve, UIP condition)

• Estimating semi‑structural models using real data

• Calibration vs. estimation

• Forecasting inflation, output, and interest rates

• Strengths and limitations of semi‑structural models

Module 4: Structural Models & DSGE Frameworks

• Foundations of DSGE modelling

• Households, firms, government, and external sector blocks

• Nominal rigidities and real frictions

• Solving and simulating DSGE models

• Policy experiments using DSGE frameworks

Module 5: Time‑Series Models for Monetary Policy

• ARIMA, VAR, BVAR, and VECM models

• Forecasting inflation and exchange rates

• Identifying shocks using structural VARs

• Combining time‑series and structural models

• Model comparison and forecast evaluation

Module 6: Forecasting Systems & Policy Analysis Tools

• Building a forecasting and policy analysis system (FPAS)

• Integrating models into a coherent forecasting cycle

• Nowcasting techniques for real‑time policy decisions

• Scenario analysis and fan charts

• Communicating forecasts to MPC and stakeholders

Module 7: Monetary Policy Transmission & Shock Analysis

• Interest rate, credit, exchange rate, and expectations channels

• Domestic and external shocks (commodity, global financial, climate)

• Assessing policy trade‑offs and lags

• Stress testing macroeconomic frameworks

• Designing policy responses to shocks

Module 8: Model‑Based Policy Design & Evaluation

• Evaluating alternative policy rules

• Policy optimization and welfare analysis

• Forward guidance and unconventional monetary policy

• Policy credibility and communication strategies

• Aligning model‑based recommendations with World Bank programs

Module 9: MPAF in World Bank & IMF Programs

• Use of models in IMF Article IV consultations

• World Bank macro‑fiscal and monetary diagnostics

• Modelling requirements in Development Policy Operations (DPOs)

• Case studies from Africa, Asia, and Latin America

• Lessons from global best practices in model‑based policymaking

Module 10: Practical Exercises & Capstone Project

• Estimating a semi‑structural model using real or simulated data

• Building a baseline forecast and alternative scenarios

• Conducting a monetary policy simulation

• Preparing a model‑based policy brief for an MPC meeting

• Capstone: Develop a full model‑based forecasting framework for a simulated economy

5. Training Methodology

• Expert‑led lectures and guided discussions

• Hands‑on modelling and forecasting exercises

• Case studies from World Bank, IMF, and central banks

• Group work and scenario‑based simulations

• Practical sessions using modelling software (Excel, EViews, R, Python, etc.)

• Capstone project with peer and instructor feedback

6. Deliverables & Outputs

Participants will receive:

• A Model‑Based Monetary Policy Toolkit (frameworks, templates, datasets)

• Semi‑structural and DSGE model templates

• Forecasting and scenario analysis tools

• Capstone project report and presentation

• Certificate of Completion from Regewall Training Institute