Publications - Working Papers IER SAS

There is a need to improve various forecasting tools for various times of crisis, such as the COVID-19 pandemic, the war in Ukraine, and the energy crisis. The key forecasting tools used in various countries include macroeconomic forecasting models in the short to medium term. The applications and development of such models have been studied for a long time at the Institute of Economic Research of the Slovak Academy of Sciences (IER SAS). This paper is divided into two parts. The first part describes the improvements of the econometric error correction model designed at the IER SAS for the purpose of making macroeconomic forecasts. In this section, the basic econometric equations are also presented, as are the individual parametric estimates. The second section presents the validation of the model, which consists of introducing several fiscal shocks to the economy. This section presents the results for selected macroeconomic variables resulting from the introduction of specific shocks.