Economic Analysis: Theory and Practice

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Developing a forecasting technique in complex economic systems simulation

Vol. 16, Iss. 3, MARCH 2017

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Received: 11 March 2016

Received in revised form: 16 May 2016

Accepted: 25 July 2016

Available online: 29 March 2017


JEL Classification: С15, С51

Pages: 573-581

Bazhenov O.V. Ural Federal University named after the First President of Russia B.N. Yeltsin, Yekaterinburg, Russian Federation

Galenkova A.D. Ural Federal University named after the First President of Russia B.N. Yeltsin, Yekaterinburg, Russian Federation

Importance Under global economic instability, improvement of methods to assess various phenomena, simulate economic systems and make accurate forecasts is one of research priorities.
Objectives The aim of the study is to present theoretical and methodological tenets of the process of projection data generation on the state of a complex goal variable.
Methods We apply methods of least squares, partial least squares and exponential smoothing to present a procedure for complex economic systems modeling.
Results We present a methodology to forecast economic phenomena on a short-term horizon based on a comprehensive description of the index, using the least squares and partial least squares methods, and to generate projected values based on the method of exponential smoothing of explicative variables. The findings may be useful for commercial organizations and executive authorities to perform a strategic analysis, develop figures for indicative planning, and justify management decisions aimed at achieving the targets.
Conclusions and Relevance We offer to forecast explicative variables rather than the considered phenomenon itself, and develop a projected value of the phenomenon based on models designed under the LS and PLS-PM methods.

Keywords: forecasting, regression modeling, integrated economic system, PLS-PM, exponential smoothing


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