Contents -- Preface -- List of Tables -- List of Figures -- Abbreviations and acronyms -- 1. Introduction -- 1.1 Macroeconomic programming exercises -- 1.2 The projection exercise, in summary -- 1.3 Uses of multiannual macroeconomic programming exercises -- 1.4 Macroeconomic "consistency" analysis -- 1.5 Programming assumptions -- 1.6 Pacífica's macroeconomy -- 1.7 The book's structure -- 2. Overview of the projection procedure -- 2.1 The projection procedure -- 2.2 Programming assumptions -- 2.3 National-accounts projections -- 2.4 External-accounts projections -- 2.5 Fiscal-accounts projections -- 2.6 Monetary-accounts projections -- 2.7 Consistency relationships among the national, external, fiscal and monetary accounts projections -- 2.8 Concluding observations on the solution procedure -- 3. Basic programming variables -- 3.1 Introduction: Basic programming variables -- 3.2 Gross domestic product and its growth rate -- 3.3 The price level and the exchange rate -- 3.4 Sectors and sub-sectors of the gross domestic product -- 3.5 Central-bank international-reserve holdings -- 3.6 Population and labor force -- 3.7 Algebraic relationships among year-average and year-end GDP, price indices, and exchange rates -- 3.8 Basic macroeconomic programming variables for "Pacífica" -- 4. Programming variables: Non-interest government expenditure -- 4.1 Introduction: Non-interest government-expenditure projections -- 4.2 Non-interest current-expenditure projections -- 4.3 Capital and other non-recurrent expenditure -- 4.4 Pacífica's government expenditure -- 5. Programming variables: External debt and internal government debt -- 5.1 Programming external and internal debt -- 5.2 External-debt programming techniques -- 5.3 External debt-rescheduling and -reduction concepts.

5.4 Debt-reduction concepts associated with the Highly-Indebted Poorest Countries initiative -- 5.5 Projections of internal government debt and financial assets -- 5.6 Pacífica's external and internal debt -- 6. National-expenditure accounts projections -- 6.1 Introduction: National-expenditure accounts projections -- 6.2 Capital formation and real-GDP growth -- 6.3 Inventory holdings -- 6.4 Exports and imports of goods and non-factor services -- 6.5 Government capital formation and consumption -- 6.6 Non-government capital formation and consumption -- 6.7 National-accounts projections for "Pacífica" -- 7. External-accounts projections -- 7.1 Introduction: External-accounts projections -- 7.2 Balance-of-payments projections -- 7.3 Reconciling above- and below-the-line balance-of-payments projections -- 7.4 External-accounts projections for "Pacífica" -- 8. Fiscal-accounts projections -- 8.1 Introduction: Financing the fiscal-expenditure flow -- 8.2 Government-revenue projections -- 8.3 Reconciling above- and below-the-line fiscal projections -- 8.4 Taking account of disaggregated public-sector entities -- 8.5 Fiscal-accounts projections for "Pacífica" -- 9. Monetary-accounts projections -- 9.1 Introduction: Monetary-accounts projections -- 9.2 Monetary policy consistent with a given macroeconomic program -- 9.3 Central-bank capitalization and decapitalization flows -- 9.4 Projecting commercial-bank performance -- 9.5 Consolidated monetary accounts -- 9.6 Monetary-accounts projections for "Pacífica" -- 10. Practical programming and projection issues -- 10.1 Introduction: Practical programming and projection issues -- 10.2 Setting up a macroeconomic projection exercise: data, assumptions, and presentation of results -- 10.2.1 Historical data -- 10.2.2 Projection assumptions -- 10.2.3 Presenting projection results -- 10.3 Setting projection assumptions.

10.3.1 "Fudging" -- 10.3.2 Econometric parameter estimates (and the stability of structural parameters) -- 10.3.3 Feasible assumptions -- 10.4 Multiannual macroeconomic projection analysis in government budget-processing cycles -- 10.5 Sensitivity analysis -- 10.6 Sensitivity analysis for "Pacífica" -- 10.7 Sensitivity analysis involving debt-reduction exercises -- 10.8 A concluding note -- Chapter annexes -- Chapter 2, Annex 1. Summary of steps to formulate a macroeconomic projection for each year -- Chapter 2, Annex 2. Macroeconomic consistency and sustainability: a simplified version of the projection exercise -- Chapter 2, Annex 3. An extension of the simplified version of the projection exercise to cover the banking system's lending capacity -- Chapter 3, Annex 1 (review). Gross domestic product, net domestic product, capital stock, capital depreciation, gross national product, and national income -- Chapter 3, Annex 2 (review). Nominal and real gross domestic product and the choice of base period -- Chapter 3, Annex 3 (review). International comparisons of GDP using nominal and purchasing-power-parity conversion -- Chapter 3, Annex 4 (review). The price level, the GDP deflator, and price indices in general -- Chapter 3, Annex 5 (review). Exchange-rate management "regimes" -- Chapter 3, Annex 6 (review). The real-effective exchange-rate concept -- Chapter 3, Annex 7 (review). Estimating an economy's historical trade-weighted real-effective exchange rates -- Chapter 3, Annex 8 (review). International reserves -- Chapter 3, Annex 9 (review). "Elasticities" -- Chapter 3, Annex 10. Ecuador's real-effective exchange rates -- Chapter 4, Annex 1. A nation's future primary education payroll: a "back-of-the-envelope" calculation -- Chapter 5, Annex 1 (review). Types of external debt in developing economies.

Chapter 6, Annex 1 (review). Expenditure accounts in the national accounts: definitions -- Chapter 6, Annex 2 (review). Expenditure accounts in developing and developed economies -- Chapter 6, Annex 3. A procedure for projecting capital formation -- Chapter 6, Annex 4. Aggregate national income and the terms-of-trade effect -- Chapter 6, Annex 5. Saving concepts: National, foreign, internal and external saving -- inflation adjustment -- and non-physical capital formation -- Chapter 6, Annex 6. A method for projecting poverty incidence -- Chapter 7, Annex 1 (review). Balance-of-payments accounts -- Chapter 7, Annex 2 (review). Balance-of-payments accounts structure -- Chapter 7, Annex 3. Sources and uses of external finance -- Chapter 8, Annex 1 (review). Fiscal, budget, accrual, and cash surpluses and deficits -- Chapter 8, Annex 2. The primary government deficit consistent with maintaining a constant debt-GDP ratio -- Chapter 8, Annex 3. Sources and uses of fiscal financing -- Chapter 8, Annex 4. Public-sector economic structures -- Chapter 8, Annex 5. Consolidating public-sector surpluses and deficits -- Chapter 9, Annex 1 (review). The "demand for money" and the price level -- Chapter 9, Annex 2 (review). The real rate of return on money and on other assets -- Chapter 9, Annex 3 (review). The money multiplier -- Chapter 9, Annex 4 (review). "Seignorage" and the inflation tax -- Chapter 9, Annex 5 (review). Performance conditions in International Monetary Fund programs -- Chapter 9, Annex 6. Formulating programming targets for "IMF-type" programs -- Chapter 9, Annex 7. A central bank's "sustainable" capital base -- Chapter 10, Annex 1. Suggestions for spreadsheet design -- Chapter 10, Annex 2. A simple "open-economy Phillips curve" -- Tables for the Pacífica exercise -- References -- Index.