Targeting debt in Lebanon : a structural macro-econometric model

Abstract EN

This paper lays out and estimates a structural macro-econometric model of the Lebanese economy to simulate the implications of accumulated debt changes on GDP and other economic indicators, and to project the growth–fiscal nexus for the six years following the last year for which national statistics are available, 2015–2020.

To these ends, historical and up-todate national accounts data for years 1992–2014 are painstakingly collected from individual government agencies, and economic framework with five macroeconomic blocks is constructed, namely: macroeconomic, government, price, monetary and financial sector, and external accounts blocks.

In total 16 behavioral equations are estimated with the help of an additional 10 identity equations defining theoretical dependency among variables in order to impute missing variables and to bound model forecasts.