Functions that model foreign trade during the East-European transition from communism to capitalism
Source: Applied Economics, Volume 43, Number 13, May 2011 , pp. 1567-1577(11)
Abstract:Analytical methods generally use a wide range of statistical mathematical functions, such as the linear function, the hyperbolic function, the higher-order parabolic function and the exponential function to better approximate economic trends. The testing of a wide range of functions is mandatory, in order to choose the ones that offer the possibility of predicting trends more accurately. In the current report, we introduce several functions and compare them on datasets concerning foreign trade of Romania over the 1996 to 2000 period. We conclude that some of the complexities of transitioning from a communist to a capitalist economy, as reflected in the foreign trade, are best captured by complex and logistic functions defined below. Furthermore, we describe a seasonal variation in the volume of trade, which may be characteristic for all transition economies in East-European countries.
Document Type: Research Article
Publication date: May 1, 2011