Page 35 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.70, # 2, 2013, pp. 32-66

dimensions other than the aggregated macro-fiscal and the five segments of the national economy.

These additional dimensions are the sectoral/sub-sectoral and commodities dimension. Whereas,
all these sectoral and commodity dimensions have been included and considered, as an integral

part of the main modules of the model. This has, nonetheless, covered all economic/fiscal, outputs,
products, inputs, imports and resources requirements functional relationships.

 The model has been solved simultaneously, i.e. that all the system of equations are
integrated and solved simultaneously, with all impacts, feedbacks and interactions are

calibrated/simulated, in one go. Despite these vital economic and mathematical facts, the model

also be solved in an individual manner, with various segments of the model handled and ran
separately. Given the built-in flexibility, the solution outcomes of a given segment would be

plugged and fed-in an alternative segment’s model setting “exogenously”, when deemed necessary.

Thus, this of course depends on the immediate needs for policy decision, data availability,
computer programming capabilities, and functional/analytical objectives and purposes.

 One of the most important features of the model is that, in its formulation and when it
has empirically implemented and solved, it has achieved and preserved the aimed at equilibrium

in, amongst others, the overall economy supply and demand, consumption and production,
investment and saving, revenues and expenditure, to mention but a few.

 The model is characterized with the built-in mechanism and fact that all its parts and

segments are interconnected, and follow sound logical economic sequences. This is, in addition to
the fact that the optimum feed-back mechanism that has been analytically and mathematically

established, between different segments and variables of the constructed macro-fiscal forecasting
model, are identified and quantified within and by the model’s solution procedures. The macro-fiscal

forecasting model formulation, settings and solution have ensured inclusion, in a realistic manner, all
economically viable relationships, activities and aspects that practically existing and normally

dominating the growth path of developing economies such as Bangladesh economy. Having said

that, the related and applicable activities, in the context of Bangladesh, have been determined during
the implementation stages, subject to the availability and the conditions of the relevant information.

 Furthermore, it is imperative to state that the macro-fiscal forecasting model structured,

developed and articulated for the Bangladesh economy, is based on the following characteristics:
i) be an effective forecasting tool, ii) creating and develop a baseline (‘As Is’) forecast (solution)

for the Bangladesh economy, iii) produce alternative scenarios (based on policy, risk and

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