PREDICTABILITY AND COMPLEXITY IN MACROECONOMICS. THE CASE OF GROSS FIXED CAPITAL FORMATION IN THE ROMANIAN ECONOMY

There is a relationship between predictability and complexity. The problem of evaluating the complexity of the macroeconomic phenomenon can be reduced to decomposition into its principal components (which may have, in their turn, a certain degree of complexity) and to identify its common sources of evolution that are predictable. In this paper, we evaluate the predictability of economic indicators and continue with its decomposition until the simplest sources allowed by available statistical data are obtained, then use this predictable sources to construct a forecasting model.predictability, complexity, principal components, consumption, investment, foreign trade, time series forecasting

The Relation between Predictability and Complexity: Domestic and Public Consumption in the Romanian Economy

We continue with the problem of the relation between predictability and complexity in the Romanian economy, analyzing other two components of GDP: domestic consumption and public consumption. The basic idea of this work is that the unpredictability of a system gives a measure of its complexity, so that in order to predict a future state of a complex system one must find the system structure explained by some simpler components that can be predicted. The complexity of the economic system is reflected in the synthetic macroeconomic indicators (GDP and its components). We find the principal components of the macroeconomic variables as a preprocessing step and model them as linear combinations of some simpler non observable predictable variables; we have constructed empirical models for domestic and public consumption; it was shown that these models are sufficiently accurate to predict for two or three periods ahead.complexity, predictability, consumption, complexity pursuit, time series forecasting

Prospects for the Evolution of the Economic Sectors’ Behavior

This paper is a synthesis of the research results obtained over the interval 2008- 20094. The problem we addressed was the following: how the evolution of an economic sector’s output was influenced when an exogenous shock occurred within its basic factors, namely the received intermediate consumptions, wage remuneration, taxes on products, gross fixed capital formation, foreign trade (expressed through the ratio of the sector’s imports to exports). The most significant distortions that may determine in circumstances of crisis severe disturbances in the functioning of the economic system were signaled.economic sectors, exogenous shock, macroeconomic simulations

Using the Leontief Matrix to Estimate the Impact of Investments upon the Global Output

The study presents in the first chapter the applied methodology and the data used for the empirical research. The economic activities were grouped into 10 sectors by aggregating the extended input-output tables for Romania (with 105 branches). The chosen reference year is 2007 - the last year for which such statistical recordings were available. The second chapter examines some of the Romanian economy’s structural features revealed by the matrices A and (I-A)-1, insisting on the driving effects of interdependencies (direct and indirect) generated by cross-sector productive flows. The third chapter focuses on the impact of gross fixed capital formation (GFCF) upon the output. On the one hand, the implications of changes in volume are estimated (for example, data on 2007 are recalculated for a variation of +/-5% in the GFCF). On the other hand, the influence of the sectoral structure of the indicator in question is quantified with the help of three different macroeconomic simulations. Further possible developments of the current investigation are discussed at the end of the paper.input-output analysis, multipliers, macroeconomic simulations

Analysis of Foreign Imbalances and Exchange Rate Policy in the Romanian Economy

Considering the previous year's results, the paper re-addresses the issue of inflationary shocks dynamics and the dynamics of the foreign imbalance - induced shocks. The ideea of a correlation between the foreign imbalances and the output gap was first introduced by Acad. Emilian Dobrescu (2004) and provides an answer to certain behaviors specific to the Romanian transition economy. The paper presents an econometric analysis of the foreign imbalances and exchange rate policies, on the basis of certain short-term error-correcting econometric models (mothly data series) that reveal the correlations between the output gap and the foreign and exchange rate imbalances, the adjustment speed to the long-term balance, as well as the reaction towards the stability condition. At this stage, the previous year's results are used .foreign imbalances, output gap, exchange rate policy;

THE "DOBRESCU MACROMODEL" OF THE ROMANIAN MARKET ECONOMY - 2005 VERSION YEARLY FORECAST AUTUMN FORECAST

In this article we present only the economic forecast of the variable of interest. For a description of the model, see RJEF, No. 1/2007 of [4]. The macromodel estimates the short and medium-term economic implications for internal policies and changes in the international context. This new version of the Romanian macromodel incorporates the experience accumulated through the utilisation of its previous forms - either experimental (tested during 1991-1995) or operational (developed during 1996-2003). At the same time, it introduces some methodological and information improvements. The most significant of them is the structural decomposition of the economy, associated with input-output techniques. Due to the relatively advanced stage of the transitional processes in Romania, the behavioural functions were accommodated - as much as possible - to the standard relationships. Unlike the versions that used the statistical series beginning in 1980, the present one is based exclusively on information concerning the period 1989-2004. Therefore, we have considered more adequately to name this variant the macromodel of the Romanian market (not transition, as before) economy.model, input-output analysis, econometric relationships, simulations

THE "DOBRESCU" MACROMODEL OF THE ROMANIAN MARKET ECONOMY - 2005 VERSION - YEARLY FORECAST*

The paper briefly presents the "Dobrescu" macromodel, the 2005 version, and the yearly forecast of the Romanian market economy computed on its basis. * (PHARE Programme RO2003/005-551.02.03 "Strengthening the capacity for analysis, macroeconomic forecast and elaboration of economic policies within the National Commission of Prognosis, the Ministry of Economy and Trade and the Prime Minister's Cabinet" - Romanian Center for Economic Policies, http://www.cnp.ro/site CNP.pdf. Published on the site Internet Securities Inc., ISI Emerging Markets, http://www.securities.com)macromodel, simulations, forecasting

THE "DOBRESCU MACROMODEL" OF THE ROMANIAN MARKET ECONOMY - 2005 VERSION YEARLY FORECAST AUTUMN FORECAST

In this article we present only the economic forecast of the variable of interest. For a description of the model, see RJEF, No. 1/2007 of [4]. The macromodel estimates the short and medium-term economic implications for internal policies and changes in the international context. This new version of the Romanian macromodel incorporates the experience accumulated through the utilisation of its previous forms - either experimental (tested during 1991-1995) or operational (developed during 1996-2004). At the same time, it introduces some methodological and information improvements. The most significant of them is the structural decomposition of the economy, associated with input-output techniques. Due to the relatively advanced stage of the transitional processes in Romania, the behavioural functions were accommodated - as much as possible - to the standard relationships. Unlike the versions that used the statistical series beginning in 1980, the present one is based exclusively on information concerning the period 1989-2004. Therefore, we have considered more adequately to name this variant the macromodel of the Romanian market (not transition, as before) economy.model, input-output analysis, econometric relationships, simulations

The "Dobrescu Macromodel" of the Romanian Market Economy* -2005 Version-Yearly Forecast Scenario for “Increase in foreign capital inflows”

In this article we present only the economic forecast of the variable of interest. For a description of the model, see RJEF, No. 1/2007 of [4]. The macromodel estimates the short and medium-term economic implications for internal policies and changes in the international context. This new version of the Romanian macromodel incorporates the experience accumulated through the utilisation of its previous forms - either experimental (tested during 1991-1995) or operational (developed during 1996-2003). At the same time, it introduces some methodological and information improvements. The most significant of them is the structural decomposition of the economy, associated with input-output techniques. Due to the relatively advanced stage of the transitional processes in Romania, the behavioural functions were accommodated - as much as possible - to the standard relationships. Unlike the versions that used the statistical series beginning in 1980, the present one is based exclusively on information concerning the period 1989-2004. Therefore, we have considered more adequately to name this variant the macromodel of the Romanian market (not transition, as before) economy.model, input-output analysis, econometric relationships, simulations

The "Dobrescu" Macromodel of the Romanian Transition Economy - Yearly and Monthly Forecast -

The paper presents the yearly and monthly forecast of the Romanian transition economy performed on the basis of the “Dobrescu” macromodel. * Source: Emilian DOBRESCU: Macromodels of the Romanian Transition Economy, third edition, Expert Publishing House, September 2000.macromodel, simulations, forecasting