“Usage of the ordinary least squares method for parameter estimation of economic growth by effects of macroeconomic variables in Central European countries on the basis of menges model”

The main goal of my research project is to investigate Central European countries using part of the Menges model and ordinary least squares method, and to find out whether this model is applicable to these countries or not. Moreover, I have made up some conclusions concerning correlation and significance of variables included in the model.

The importance of this research is significant, as it helps us test the influence of some economic factors on the economic development of Central European countries, as well as to conduct a study of the dependence between the main economic indexes. The results of this research will allow me to draw some conclusions about whether the Menges model is applicable for Central European countries’ data or not.

My objective was to focus on the first equation of the model:

(Y_t = « о + d i * Y_t —i + a 2 *I_t + s_t

{        EM = 0

(          t) = COTlSt

Here, the unknown variables are Y - GDP, Yt-1 (GDP of the previous year) and I (net capital formation).

In my research, I looked at five Central European Countries: Hungary, Slovakia, Romania, Czech Republic and Ukraine. These countries are closely located to each other and have more or less similar economic structure and statistical data. I analyzed data from 1995 to 2013, which I obtained from the World Bank website.

I used Microsoft Excel to estimate my model and find all the needed parameters.

After analyzing each countries data, here is the overview I got:

Figure 1. Results of the research

According to the given results, only Slovakia passed all the tests. Therefore, we can make a conclusion that based on my research the Menges model is only applicable to Slovakia of all the Central European Countries I looked at. As it is known, Menges developed this model for Western Germany, so my result can mean, that the current economic situation in Slovakia resembles the one in Western Germany in the early second half of the 20th century.

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Фаррахов А.Р., д.с.н.

ГРАЖДАНСКОЙ СЛУЖБЫ В РФ

В соответствии с Федеральным законом, государственная гражданская служба – это вид государственной службы, представляющей собой профессиональную служебную деятельность граждан Российской Федерации на должностях государственной гражданской службы Российской Федерации [1].

"Экономика и социум" №4(13) 2014