The South African NiGEM expansion

This paper presents a new macroeconometric model for South Africa that forms part of the global system of models based on the National Institute Global Econometric Model (NiGEM). NiGEM is used by many central banks as well as the Organisation for Economic Co-operation and Development. The NiGEM-SA model, which provides a more detailed representation of South Africa’s financial sector, is a new tool in the South African Reserve Bank’s (SARB’s) suite of models. It will complement the SARB’s other models and help with understanding the impact of global economic shocks and the cyclical impacts of climate-related shocks. This paper presents key features of NiGEM-SA and illustrates its properties through a series of simulations. The simulation results indicate that model responses are in line with estimates in the empirical literature.