Analogous Simulation of Nation-Scale Macroeconomic Decisions (Is the Baltic Able to Arrange the Uefa Euro 2024?)

Viktoras Justickis, Nikolajus Markevičius

Abstract


Taking of the nation-scale (macroeconomic) decisions is one of the most challenging problems in the modern economy. The main problem is unimaginable complexity of modern national economies. Every nation-scale decision influences multiple its sides, innumerable factors, events, consequences, interconnections. Therefore, the consequences of every such decision are very multisided, conflicting, unanticipated. Beside the intended outcomes, a great deal of unintended, unforeseen, harmful, contra- productive ones caused.
This inability to foresee exact outcomes of macro-decisions is caused, first of all, by our inability to model and simulate national economy. Despite all brilliant achievements and quick progress in the modern economic modeling, we are still very far from building models including many thousands of factors acting in any national economy and thus, we are unable to simulate its reaction to our decisions.
This, in turn, brings the modern day situation, when even the most important, nationalscale economic decisions are still taken politically, in the most intuitive, subjective, speculative and, thus, deficient way.
All this brings the urgent necessity to find alternative methods of macroeconomic modeling, able at least to some degree simulate reactions of the national economy to great macroeconomic decision and this way to improve the current intuitive and political decision taking.
In this paper one of such ways- analogous simulation is considered.
The general idea of this approach is to study how the supposed national - scale decision worked in countries with economies that are as much as possible similar to our, especially in aspects, most relevant to decision under consideration.
The belief that such a similar economy can be used as a model is based upon three presumptions:
1. “The similarity causes similarity” presumption, supposing that the more observable similarities exist between two economies the more also unobservable ones they do have.
2. ”Decision related similarity” presumption, saying that similarities of directly affected sides of economy are of especial salience when using another economy as a model to forecast effects of some decision.
3. “The common core” presumption , saying that the affinity between two similar economies is still more enlarged (multiplied) by sharing all traits that are basic for all the modern market economy.
4. “The shared space” presumption. This presumption supposes that affinity between two similar economies is still more enlarged by sharing the common (e.g., European) geographic, cultural, economic, politic space and sharing all conditions specific for this space.
All this produces multisided, thousands of different factors including similarity between such economies. In this situation we can consider one economy and effects of some action in it as a model, able to forecast similar effects in the other one.
As illustration, the highly challenging national-scale decision on organization of UEFA Euro 2024 in the Baltic is analyzed. Portugal (that already has arranged the UEFA Euro) and its national economy were selected as a highly suitable analogue model for Baltic countries and for probable success UEFA Euro 2024 in the Baltic.

Keywords


nation-scale; macroeconomic decisions; macroeconomic modeling; UEFA EURO 2024; Baltic countries; Finland; football; the free market; state regulation

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DOI: http://dx.doi.org/10.13165/SMS-13-5-3-07

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"Societal studies" ISSN online 2029-2244 / ISSN print 2029-2236