Description of behavior of national economies in state space.docVIP

Acta Montanistica Slovaca Ro?ník 13 (2008), ?íslo 1, 183-186 Description of behavior of national economies in state space Ivo Petrá?, Dagmar Bednárová and Igor Podlubny 1 Popis spravania narodnych ekonomik v stavovom priestore This paper deals with analysis of behavior of national economies by using the total least squares method. National economies are described in state space of the following variables: gross domestic product, inflation, and unemployment. Their behavior is investigated by fitting their phase trajectories to plane. A possible method of description of the dynamical properties of national economies by differential equations is proposed. In conclusion the use of the investigated mathematical model for prediction and evaluation of the performance of national economies is discussed. A MATLAB routine for fitting 3D data to lines and planes in 3D is provided. Key words: total least squares, national economies, state space Introduction In this article we consider the different versions of the least squares method – so called orthogonal regression, which has been studied by several authors (see References). The main reason is the fact that orthogonal regression is a suitable tool for fitting lines and surfaces in multidimensional space, while even the use of classical regression in 2D is not so natural. We apply the orthogonal regression method to describing the national economies of the “well-developed” countries group in the state space of three variables: gross domestic product (GDP), inflation, and unemployment. The development of the national economies under study is described by their trajectories in the chosen state space. We discovered that for each particular country the trajectory of its national economy lies approximately in one plane, so the normal vector of this plane and one of its points (e.g.