Latvian and Europe construction comparison: stability and reasons of crisis

Recently construction industry in Latvia has experienced substantial changes. Stabile increase of construction since 2002 has transformed to a boom in 2006-2007. Year 2008 characterizes with continuation of the boom in first half-year and with the rapid downslide in the second half-year. The downslide can cause the protracted recession not only in construction industry, but also in the whole national economy. In the paper Latvian construction industry is comprehensively evaluated and compared with the Baltic States and the European Union. State of dwelling funds, dynamics of construction industry and factors influencing demand, including solvency of population, desires and necessities; factors of commercial and government demand are presented. Industry costs are analyzed separately: natural resources, production of building materials, fixed assets and attraction of money capital, personnel costs. Possibilities to obtain profit while working in construction were analyzed. Basing on the analysis, suggestions for improvements in the industry activities are elaborated.construction economics, demand, living conditions, real estate, solvency, credit burden, investments

Latvia’s incoming in European Union economic effect estimation

Joining the European Union big opportunities in the international markets have opened for Latvia. Paper purpose is to investigate influence of international integration processes on development of economy of Latvia. In the paper Latvian economic indicators before and after entering the EU are compeered. Latvia's incoming in EU increased the amount of received means from structural and cohesion funds, removed the trading barriers, increases foreign investments, reduced unemployment, increased labor migration, and increased prices and population purchasing power.economic growth; international market integration; globalization; investments; unemployment; labor migration; inflation

Development of System Dynamic Model of Latvia’s Economic Integration in the EU

Joining the European Union big opportunities in the international markets have opened for Latvia. Paper purpose is to investigate influence of international integration processes on development of economy of Latvia. Latvia's incoming in EU increased the amount of received means from structural and cohesion funds, removed the trading barriers, increases foreign investments, reduced unemployment and increased labor migration. In the paper the system dynamics model, which describes integration of the Latvian economy into EU, is developed. In the model international financial flows connected with Latvia and EU; import, its relation to internal producing; and migration processes are considered. Model functioning is measured considering various scenarios of situation development. The developed model can be used not only in the analysis of Latvia’s economic integration in the EU, but on its basis it is possible to create models of regional cohesion in Europe.Europe, integration, cohesion, economic grow, migration, capital, price, inflation, consumption, output, GDP, unemployment, economic forecasting, system dynamic, simulation

Modelling crediting volume by using the system dynamic method

This paper describes a system dynamic model of credit burden, and it provides an estimation of credit volume. The elaborated model calculates and estimates household budget balance and budget forming flows: income and expenditures, loan and interest payments, increase in budget balance depending on the amount of the granted loan and the costs associated with the purchase of the loan object. The elaborated model can also be applied in analysis of the national economy and in entrepreneurship. The paper presents a method for determining the amount of the loan for purchasing a flat for a household. It also provides modeling results of Latvia’s credit system and conclusions regarding its further development.system dynamic, model, credit burden

Construction industry forecasting system dynamic model

In a paper construction branch forecasting model which allows to estimate the industry development problems is shown. Difference from anthers models, in given paper the main attention is turned to the building of the living area. Model stands from sub model (blocks): amount of apartments, real estate prices, necessity of apartments and living area forecasting models. Their essence and necessity are shown in separate sections. In the paper final, produced model is applied practical, are given model forecasts. The apartments amount forecasting model show supposition, in which, if there is deficit of dwellings in the economic system, then, first of all, are finance and construct apartments with little areas, i.e., multistory buildings with one-room apartments. Apartment’s amount increase depends from the building financing, as also from middle apartment area and building costs of square meter. The real estate prices forecasting model show supposition, that the once certain price is actual while it is not changed with prices influential parameters. The prices influential parameters are: extend (or diminish) of the live fund, the total market influence on separate market segments (and vice versa). The apartment’s necessities forecasting model show supposition, that in beginning a certain volume of necessities remains not changed, while on their has not changed with influential factors. Between the influential factors there are: apartments amount increase – it diminish apartments amount necessities; apartments wear (amount diminish) - it increase apartments amount necessities; improve of live circumstances - it diminish apartments amount necessities. The live area forecasting model is an additional model, which provides functioning of another’s models. Shown supposition was related with a population tries to purchase apartments with such properties which is similar to present at the market apartments. Till with it the middle area in each analyse group is not changes. In not changes middle area circumstances, knowing apartments amount, it is possible to calculate the total live area. Accumulating statistical data it is to adjoin with a problem, that not all data was certain, for a few data only possible borders of oscillations are certain. Till with that, in the paper are examined a few possible situation development variants. Buildings and real estate market development simulated on separate its segments and in an aggregate. Analysing the forecast data for aggregate apartments building in Latvia, in basic scenario it is certain, that the counterbalanced apartments building volume is about 1800 apartments in the year, but noticing oscillations of overproduces and necessities, this size can brief hesitate from 1434 to 2019. A sensitiveness analysis confirms basic scenario, complements it and extends with credible horizon borders.construction demand, housing fund, system dynamic, market modeling, simulation, economic forecasting

Latvian construction brunch development forecast

In work development of the construction branch in Latvia is forecasted. The forecast is developed used system dynamic method (by J. Forrester) and Latvian construction brunch forecasting model (RTU). Construction demand consists of the state construction orders, construction demand of inhabitants and enterprises. Definitely, that in Latvia in the given conditions a dominant role in the common construction demand have demand of the enterprises. But, with growth of well-being of the population, the dominant role may pass to construction demand of inhabitants, and/ or to the state construction orders in other circumstances. In Latvian construction industry are problems in construction material production, with profession workers and management, with producing means and low enterprises spirit in Latvians firm.nozares prognozēšana, būvniecības ekonomika, dinamiskā simulācija, modelēšana

Development of Macroeconomic Equilibrium Model with the System Dynamics Method

Development of an economic situation last 20 years has passed in Latvia through various stages. Including - Post-Soviet re-structuring of demand and closing of industrial giants; development of the economy based on transit; development of craft manufacture, small enterprises and branch of services (after joining to EU) and their decline because of transition to the system focused for export of a manpower. In 2009 the following stage of economic development became swept up. Latvia has not sufficed resources for a survival, financing from outside the international community has been requested. Unfortunately, any of the mentioned models is not necessary for the developed countries, therefore it is possible to draw a conclusion that the Latvian economy still is in process of transformation. It is necessary to define possible directions of the further development. In Latvia to estimate economy development, the model of system dynamics which quantitatively analyzes macroeconomic balance is developed. Considering a theme urgency, article purpose - to reflect the developed model. For purpose achievement following problems are put forward: • to reflect model structure, to show its forming blocks; • to prove economic interrelations and assumptions which are accepted in model; • to show model application on an example of separate economic indicators. The model presented in article, has been developed with use of a method of system dynamics. The method is chosen taking into account difficult interaction between macroeconomic processes. It is a unique quantitative method which allows to estimate not only plural causally - investigatory communications, but also their return interaction. Macroeconomic balance is based on feedback in this connection for its analysis, during the long-term period, it is recommended to use a method of system dynamics.системная динамика; национальная экономика; модель макроэкономического оборота; потребление; накопления; инвестиции; налоги; занятость

Construction branch forecasting model

In a paper construction branch forecasting model which allows to estimate the industry development problems is shown. Difference from anthers models, in given paper the main attention is turned to the building of the living area. Model stands from sub model (blocks): amount of apartments, real estate prices, necessity of apartments and living area forecasting models. Their essence and necessity are shown in separate sections. In the paper final, produced model is applied practical, are given model forecasts. The apartments amount forecasting model show supposition, in which, if there is deficit of dwellings in the economic system, then, first of all, are finance and construct apartments with little areas, i.e., multistory buildings with one-room apartments. Apartment’s amount increase depends from the building financing, as also from middle apartment area and building costs of square meter. The real estate prices forecasting model show supposition, that the once certain price is actual while it is not changed with prices influential parameters. The prices influential parameters are: extend (or diminish) of the live fund, the total market influence on separate market segments (and vice versa). The apartment’s necessities forecasting model show supposition, that in beginning a certain volume of necessities remains not changed, while on their has not changed with influential factors. Between the influential factors there are: apartments amount increase – it diminish apartments amount necessities; apartments wear (amount diminish) - it increase apartments amount necessities; improve of live circumstances - it diminish apartments amount necessities. The live area forecasting model is an additional model, which provides functioning of another’s models. Shown supposition was related with a population tries to purchase apartments with such properties which is similar to present at the market apartments. Till with it the middle area in each analyse group is not changes. In not changes middle area circumstances, knowing apartments amount, it is possible to calculate the total live area. Accumulating statistical data it is to adjoin with a problem, that not all data was certain, for a few data only possible borders of oscillations are certain. Till with that, in the paper are examined a few possible situation development variants. Buildings and real estate market development simulated on separate its segments and in an aggregate. Analysing the forecast data for aggregate apartments building in Latvia, in basic scenario it is certain, that the counterbalanced apartments building volume is about 1800 apartments in the year, but noticing oscillations of overproduces and necessities, this size can brief hesitate from 1434 to 2019. A sensitiveness analysis confirms basic scenario, complements it and extends with credible horizon borders.būvniecības pieprasījums; dzīvojamais fonds; sistēmdinamika; tirgus modelēšana un imitācija; ekonomiskā prognozēšana

Housing model in the post socialistic countries on the example of Latvia

In a paper construction branch forecasting model which allows to estimate the industry development problems is shown. Difference from anthers models, in given paper the main attention is turned to the building of the living area. Model stands from sub model (blocks): amount of apartments, real estate prices, necessity of apartments and living area forecasting models. Their essence and necessity are shown in separate sections. In the paper final, produced model is applied practical, are given model forecasts. The apartments amount forecasting model show supposition, in which, if there is deficit of dwellings in the economic system, then, first of all, are finance and construct apartments with little areas, i.e., multistory buildings with one-room apartments. Apartment’s amount increase depends from the building financing, as also from middle apartment area and building costs of square meter. The real estate prices forecasting model show supposition, that the once certain price is actual while it is not changed with prices influential parameters. The prices influential parameters are: extend (or diminish) of the live fund, the total market influence on separate market segments (and vice versa). The apartment’s necessities forecasting model show supposition, that in beginning a certain volume of necessities remains not changed, while on their has not changed with influential factors. Between the influential factors there are: apartments amount increase – it diminish apartments amount necessities; apartments wear (amount diminish) - it increase apartments amount necessities; improve of live circumstances - it diminish apartments amount necessities. The live area forecasting model is an additional model, which provides functioning of another’s models. Shown supposition was related with a population tries to purchase apartments with such properties which is similar to present at the market apartments. Till with it the middle area in each analyse group is not changes. In not changes middle area circumstances, knowing apartments amount, it is possible to calculate the total live area. Accumulating statistical data it is to adjoin with a problem, that not all data was certain, for a few data only possible borders of oscillations are certain. Till with that, in the paper are examined a few possible situation development variants. Buildings and real estate market development simulated on separate its segments and in an aggregate. Analysing the forecast data for aggregate apartments building in Latvia, in basic scenario it is certain, that the counterbalanced apartments building volume is about 1800 apartments in the year, but noticing oscillations of overproduces and necessities, this size can brief hesitate from 1434 to 2019. A sensitiveness analysis confirms basic scenario, complements it and extends with credible horizon borders.спрос, жилищное строительство, системная динамика, моделирование, имитация, экономическое прогнозирование

Modelling of the new product introduction into market, using system dynamics method

System dynamics methods have found a wider application in decision making recently .The aim of the present paper is to substantiate the application of the possibilities of system dynamics methods, by modelling innovations and the introduction of new products into the market. The research presents the model of forecasting the mobile telephone market in Latvia; it gives the comparison of the software of system dynamics modelling. The simulation of the mobile telephone market has been worked out and the potential market volume has been determined. The actual market dynamics has been compared to the simulation results and the factors which influence the market volume have been investigated and suggestions for analysing these factors have been provided. The author presents the comparison of the Bass Diffusion Model modification with that of the Sterman Model for repeated purchases, with modification being adjusted for the Latvian mobile telephone market. The author admits that each mobile telephone purchased becomes obsolete after exceeding the average service time. The paper also gives an analysis of J. Sterman`s approach, who considers that product obsolescence is directly proportional to the number of buyers (mobile phone users) and inversely proportional to the product average service time.sistēmdinamika, modelēšana, imitācija, inovācijas, jauns produkts, mobilo telefonu tirgus, mārketings