Macro-econometric model of Albania: A follow-up

This paper follows up on the previous paper titled “A macro econometric model approach for Albania”. The objective is to present the progress of the macro-model during 2007. Actually, the model is enriched with the supply side and fiscal sector and includes the main channels of the transmission mechanism of the monetary policy. We have applied a new method of disaggregating annual to quarterly data and also some new definition of key variables, such as disposable income. The results indicate that the model is stable, it converges in the long run to its desirable path and it may be suitable for different policy scenarios. On the other hand, the forecast performance of the model was so far not analysed.