governor title date event venue : mr. tariq bajwa : keynote address by mr. tariq bajwa at launching ceremony of international remittance through block chain technology : january 8, 2019 : launching ceremony of international remittance through block chain technology : serena hotel islamabad mr. yao jing, honorable ambassador to the people ’ s republic of china, mr. eric jing, chairman & ceo, ant financials, mr. roar bjaerum, svp, head of financial services, telenor group & chairman valyou and mr. shahid mustafa, president & ceo, telenor microfinance bank, ladies and gentlemen! assalam o alaikum and good evening! 1. it is indeed very exciting for me to launch this initiative by telenor pakistan that would enable the transfer of cross border remittances using blockchain technology in near real time. this would bring convenience and efficiency for both remitters and their beneficiaries. for this, i would like to congratulate ant financial, telenor microfinance bank and other key stakeholders such as standard chartered bank for being the pioneers in the adoption of new technologies for providing a payment solution, which many other market page 1 of 10 players have only been thinking of. this puts pakistan on the map of few countries in the world that have launched international remittance using block chain technology. 2. though this initiative, valyou in malaysia and easypaisa in pakistan will facilitate cross - border remittance service through e - wallet platforms, which is based on block chain technology developed by alipay, a subsidiary of ant financial. this block chain based wallet - to - wallet remittance service provides instant and secure way for pakistani emigrants to transfer money from malaysia to pakistan and will significantly improve the current amount of usd 1 billion received from malaysia in home remittances. 3. ladies and gentlemen! as you all know that remittances are considered a vital component in our economy since they play an important role in reducing the current account deficit and improve the level of our foreign exchange reserves. pakistan received us $ 19. 6 billion remittances during fiscal year 2017 - 18, which is equal to over 6 % of our gdp, equivalent to over 50 % of our trade deficit, 85 % of exports and over one - third of imports. home remittances from abroad therefore play an extremely important role in our economic and

and forecasting which can answer all potential policy questions. therefore, central banks need multiple models for policy advice. some macroeconomic and econometric models which central banks use nowadays include univariate, reduced - form, simultaneous equation, state - space, semi - structural, bayesian methods and dynamic stochastic general equilibrium models ( dsge models ). let me now turn to the evolution of the macroeconomic models at central banks over the years. macroeconomic modeling experienced a paradigm shift after the general acceptance of the lucas critique and the emergence of rational expectations theory. this in effect rendered simultaneous equation models, which were popular until the late seventies, obsolete and unleashed a revolution in the form of real business cycle ( rbc ) theory. lucas posited that as the behavior of economic agents adapts to changes in the economic structure, policy advice based on models becomes increasingly useless. to address the lucas critique, 1 / 3 bis central bankers'speeches macroeconomists came forward with models that contained stronger micro foundations. this class of models dates back to 1982 and is today classified as dsge models. in later incarnations, a wider set of distortions and a host of shocks came to play a larger role in these macroeconomic models. for instance, the incorporation of nominal frictions in rbc theory transformed these models into new keynesian dsge models. the popularity of such models among central banks has grown manifold, mainly due to their ability to explain how nominal shocks can create real impacts in the short - run. over time, these models have become workhorse policy analysis tools, especially for monetary policy advice, scenario analysis and forecasting. alongside standard micro founded dsge models, central bankers also utilize reduced - form versions of dsge models, including forecasting and policy analysis system ( fpas ) and quarterly projection models ( qpm ), for policy advice and forecasting. like dsge, these models also serve as useful tools for shock decomposition and scenario analysis. in terms of the use and advancement of macroeconomic models, the role of central bank researchers has been stellar in recent years. researchers at major central banks have developed in - house dsge models, calibrated on specific characteristics in their economies. today many central banks, both in developed and emerging market economies ( emes ) have developed their own models and central banks in saarc countries are no exception. central banks in some of the saarc countries have invested heavily in human resources and computational tools for