Page 53 - Azerbaijan State University of Economics

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

to do more of the adjusting. In the near future, emphasizing money supply, money demand and

exchange rate stability, to anchor inflation expectations, is almost unavoidable. With this in
mind, the monetary aggregate characteristic of the Bangladesh economy, accordingly, has been

modeled. It is a de facto, money demand in an economy is; determine by real income, interest
rate and rate of inflation. In another word interest rate is, by and large, reflecting the opportunity

cost of holding money. While inflationary measures, and the likely impact on domestic inflation
rate, and price movements in Bangladesh economy, resulting from government recurrent

expenditure, money supply and velocity of money, changing in the world commodity price and

overall changes in Bangladesh imports price movements. These financial sector and monetary
segment related inflation impacts are shown in equations (78-81) respectively.

Last but not the least, the complete external sector segment modelling and articulation, is

postulated by the set of systems of equation (69-77), where the overall aggregate and detailed
components of each of the balance of trade (BOT), current account balance (CAB), capital account

balance (CAPAB) and balance of payments (PoBs), have all been specified, modelled and
articulated using the disaggregated and indicated equations, (for further details please see Al-Ali,

Hashim (2012) [The four segments modelling modules (real sector, fiscal, financial and external) have
been structure, numerically articulated, implemented, documented and submitted, in November 2012.].

5. The Modelling Statistical Data Inputs, Sources and Valuation Settings

After designing and constructing the macro-fiscal forecasting model for the Bangladesh
economy, the author has carried out a national data assessment and analysis. Resulting from

these efforts, data gaps within the national economy have been identified, as well as the data
requirements by the model on different segments of the economy and on various variables within

each segments, have been specified and thoroughly defined [See for the detail data assessment and data
requirement: Al-Ali, Hashim (2012) “Statistical Data Assessment and Data Requirements for the Macro-Fiscal Modelling
Implementation”, Technical Report No. -4-, MEW/MOF, Dhaka, March.].

The main purpose of this section of the report is to shed a light on and present the data

input and the database that used to solve various model’s equations, the source of these data and
the data valuation and uses of different deflators for different type of variables, within the overall

model’s framework.
5.1 The Inputs Data and their Dimensions; obtaining, organizing and cleaning and

structuring a complete macroeconomic database, with a substantive and statistically viable size of

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