Qualitative equationless macroeconomic models as generators of all possible forecasts based on three trend values—Increasing, constant, decreasing

Karel Doubravsky and Mirko Dohnal

Structural Change and Economic Dynamics, 2018, vol. 45, issue C, 30-36

Abstract: This paper studies macroeconomic models based on a set of qualitative heuristics. A qualitative heuristic is described using just trends; i.e. increasing, decreasing, constant. The trends are the least information intensive quantifiers. E.g. an unemployment is increasing more and more rapidly represents the positive first time derivative of the unemployment (increasing) and positive second derivative (more and more rapidly). It means that not just trends but higher derivatives can be incorporated into a model if they are qualitatively known. No quantitative quantifiers, e.g. numbers, fuzzy sets, are used in this paper. The solution of a qualitative model is a set S of scenarios. A set T of transitions among the set of scenarios S is used to generate an oriented graph H. Any future and past time behaviour of the system under study is described by a path within the graph H. A ten-dimensional macroeconomic serves as a case study.

Keywords: Qualitative; Dynamics; Multidimensional; Macroeconomic forecasting (search for similar items in EconPapers)
JEL-codes: A12 C59 C63 E27 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:45:y:2018:i:c:p:30-36

DOI: 10.1016/j.strueco.2018.01.001

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