Development of System Dynamic Model of Latvia’s Economic Integration in the EU

Skribans, Valerijs (2011): Development of System Dynamic Model of Latvia’s Economic Integration in the EU. Published in: Proceedings of the 29th International Conference of the System Dynamics Society (2011): pp. 1-16.

Abstract

Joining the European Union big opportunities in the international markets have opened for Latvia. Paper purpose is to investigate influence of international integration processes on development of economy of Latvia. Latvia's incoming in EU increased the amount of received means from structural and cohesion funds, removed the trading barriers, increases foreign investments, reduced unemployment and increased labor migration. In the paper the system dynamics model, which describes integration of the Latvian economy into EU, is developed. In the model international financial flows connected with Latvia and EU; import, its relation to internal producing; and migration processes are considered. Model functioning is measured considering various scenarios of situation development. The developed model can be used not only in the analysis of Latvia’s economic integration in the EU, but on its basis it is possible to create models of regional cohesion in Europe.

• Item Type: MPRA Paper
• Language: English
• Keywords: Europe, integration, cohesion, economic grow, migration, capital, price, inflation, consumption, output, GDP, unemployment, economic forecasting, system dynamic, simulation
• Subjects: F - International Economics > F1 - Trade > F16 - Trade and Labor Market Interactions; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E22 - Capital; Investment (including Inventories); Capacity; O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O19 - International Linkages to Development; Role of International Organizations; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E21 - Macroeconomics: Consumption; Saving; Aggregate Physical and Financial Consumer Wealth; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies; F - International Economics > F1 - Trade > F15 - Economic Integration; F - International Economics > F0 - General > F00 - General; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E24 - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E27 - Forecasting and Simulation; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E17 - Forecasting and Simulation; O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance; F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment; Long-Term Capital Movements; F - International Economics > F2 - International Factor Movements and International Business > F22 - International Migration; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply; Credit; Money Multipliers; O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources; Human Development; Income Distribution; Migration; F - International Economics > F1 - Trade > F14 - Country and Industry Studies of Trade; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F47 - Forecasting and Simulation; O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C53 - Forecasting and Other Model Applications; F - International Economics > F2 - International Factor Movements and International Business > F20 - General; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C50 - General; F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E23 - Production; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J61 - Geographic Labor Mobility; Immigrant Workers; E - Macroeconomics and Monetary Economics > E0 - General > E00 - General; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E20 - General

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