There are some fundamental economic uncertainties. We cannot forecast
economic events with a very high scientific precision. It is very clear that there does not
exist a unique "general" model, which can yield all answers to a wide range of
macroeconomic issues. Therefore, we use several different kinds of models on segments
of the macroeconomic problem. Different models can distinguish/solve economy
desegregation, time series analysis and other subfactors involved in macroeconomic
problem solving. A major issue becomes finding a meaningful method to link these
econometric models.
Macroeconomic models were linked through development of an Expert System for
National Economy Model Simulations (ESNEMS). ESNEMS consists of five parts: (1)
small-scale short-term national econometric model, (2) Methodology of Interactive
Nonlinear Goal Programming (MINGP), (3) data-base of historical macro-economic
aggregates, (4) software interface for interactive communications between a model and
a decision maker, and (5) software for solving problems. ESNEMS was developed to
model the optimum macro-economic policy of a developing country (SFRY-formerly
Yugoslavia).Most econometric models are very complex. Optimizing of the economic policy is
typically defined as a nonlinear goal programming problem. To solve/optimize these
models, a new methodology, MINGP, was developed as a part of ESNEMS. MINGP is
methodologically based on linear goal programming and feasible directions method.
Using Euler's Homogeneous Function Theorem, MINGP linearizes nonlinear
homogeneous functions. The highest priorities in minimizing the objective function are
the growth of gross domestic product. and the decrease of inflation.
In the core of the optimization model, MINGP, there is a small-scale econometric
model. This model was designed through analysis of the causal relations in the SFRY's
social reproduction process of the past 20 years. The objective of the econometric model
is to simulate potential short term (one-year) national economic policies. Ex-ante
simulation and optimization of economic policy for 1986 showed that, in SFRY, non-
consistent macro-economic policy was resolute and led to both slower economic
development and more rapid growth of inflation.
