Macmod, a macroeconomic model for the Tanzanian economy

Abstract

This report outlines the structure of a macroeconomic model for the Tanzanian economy. It consists of a core IS-LM/ Mundell-Fleming model, an SS-DD framework for estimating the consumer price inflation and other price indices, and finally a sectoral supply block. The latter is at an early stage of development, due to inadequate data. The report starts with a discussion of some key features of the Tanzanian economy, emphasizing structural weaknesses and recent gains in terms of stabilizing the economy. It continues with the presentation of the model. The workings of the model are demonstrated by a set of scenarios where various policy measures in the face of an exogenous shock are explored. Finally the report presents a study of the agricultural sector.