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Modelling National Economic System: A Case of the Croatian Economy

Author

Listed:
  • Sovilj Siniša

    (Associate Professor Faculty of Informatics Juraj Dobrila University of Pula (Address: Rovinjska 14, 52100 Pula), Croatia)

  • Tkalec Marina

    (PhD Senior Research Associate Institute of Economics Croatia)

  • Pripužić Dominik

    (Economic Analyst Croatian National Bank Croatia)

  • Kostanjčar Zvonko

    (PhD Full Professor Faculty of Electrical Engineering and Computing, University of Zagreb Croatia)

Abstract

In this study we evaluate a national economic model using a system dynamics approach. We use a set of macroeconomic data for a transition economy to validate the model behaviour in the past, and then simulate the alternative paths of key macroeconomic variables. Instead of studying only a fraction of the economy, or using simple and abstract models, we build a large-scale national economic model. As the study is based on system dynamics information feedback, it provides additional insights about the macroeconomic effects of the economic policy, making it a valuable tool for economic policy analysis. Such insights are instrumental for understanding the total effects of economic policies and their full economic consequences. To demonstrate this, we have simulated one actual economic policy intervention and its alternative scenario.

Suggested Citation

  • Sovilj Siniša & Tkalec Marina & Pripužić Dominik & Kostanjčar Zvonko, 2023. "Modelling National Economic System: A Case of the Croatian Economy," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 115-144, June.
    • Handle: RePEc:vrs:seejeb:v:18:y:2023:i:1:p:115-144:n:14
    DOI: 10.2478/jeb-2023-0009
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    References listed on IDEAS

    as
    1. Jeremy C. Stein, 2012. "Monetary Policy as Financial Stability Regulation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(1), pages 57-95.
    2. David Colander, 2011. "Is the Fundamental Science of Macroeconomics Sound?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 43(3), pages 302-309, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    national economic model; system dynamics; macroeconomics; economic policy analysis;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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