Uncertainty Bands: A Guide to Predicting and Regulating Economic Processes

Description

With the increasing role of economic uncertainty, improving the efficiency of forecasts is ever so important. This book makes suggestions on how to evaluate the key economic indicators under uncertainty. It presents the interval method to study economic indicators, which will allow us to understand the possibilities of forecasting and the irregular nature of the economy. It is shown that with the accumulation of negative phenomena in a seemingly stable situation the effect of a compressed spring may snap into action. The book outlines the uncertainty relations in the economy, the minimal uncertainty interval, the effect of an expanding uncertainty band, sensitivity thresholds, as well as the principles of systematization and forecasting of economic indicators. The book presents ways to facilitate economic development, assess the quality of a forecast, and increase the efficiency of forecasts and decision-making in conditions of uncertainty.

Dr. Ashot Tavadyan is member of the Russian Academy of Natural Sciences, member of the International Information Academy of Canada, First Chairman of the Control Chamber of Armenia, Head of Center for Economic Research, Editor-in-Chief of Armenian Economic Journal, NAS RA, Chairman of Mathematical Methods in Economics, Armenian State University of Economics.

"Professor Tavadyan has written an interesting book about the philosophy of economic forecasting investigating its connection to uncertainty and warning about the unpredictability of the economic landscape and the need to consider the 'uncertainty band' in all decisions related to economic predictions." - Professor Spyros Makridakis, University of Nicosia UNIC, director of the Institute for the Future IFF, Cyprus. "This is a splendid book, explaining to a wide readership some of the difficulties of making economic predictions. In doing so, it can help reduce the pressure on economists to provide estimations they cannot substantiate." - Professor Itzhak Gilboa, Professor Economics and Decision Sciences, HEC Paris, France. "Ashot Tavadyan has written an excellent book on a crucial topic. Mainstream economics is very poor at dealing with uncertainty, often with catastrophic results. Professor Tavadyan introduces a viable and practical methodology for dealing with this uncertainty." - Nick Silver, managing director of Callund Consulting Limited, founder and director of Climate Bonds and Radix, visiting fellow at the London School of Economics and Bayes Business School, and lecturer at Trinity College Dublin and City University, UK. "In his captivating book 'Uncertainty Bands', Prof. Tavadyan introduces new grounds for economic forecasting. This is especially important for extreme and foreseeable events when the existing methods of prediction are irrelevant. The book is very timely. Given the volatile state of the world nowadays, this book is a must-read for politicians, businessmen, statisticians, and economists." - Professor Moawia Alghalith, Department of Economics, UWI, WI. "Policy-makers and other economic actors need to form some view of the future even if it is only about how uncertain the future is. This book addresses this need, exploring ways of forming expectations under uncertainty beyond formal modeling. In the process, Ashot Tavadyan explains the limitations of conventional prediction methods applied to a complex evolving reality." - Professor Sheila Dow, Emeritus Professor, University of Stirling, USA. "The book is a refreshingly expository volume on Uncertainty Bands, exhorting the readers with the warning that 'Equilibrium can be dangerous'. Economic indicators are forecast within intervals of relevance - and outside they are either 'quackeries' or 'tautologies'. This attractive and readable book encompasses much - like the business cycle - and achieves what it sets out to do, i.e., show the relevance, for forecasting, of considering intervals for predictions; no fine-tuning in this finely crafted book." - Professor Vela Velupillai, Senior Visiting Professor at the Madras School of Economics, India. "With his book, Ashot Tavadyan succeeds in rethinking the principles of uncertainty in economics. Uncertainty is the new normal in economic ontology and the necessary assumption for shaping economic policy in the coming decade. We expect the unpredictable. In the future, successful economic policy will arise through creativity, will and rigorous critical thinking in discourse. It will no longer be possible to derive conclusions about the future from the past. The principles of uncertainty are both menacing and necessary to moving forward in economics." - Dr. Julia Koehn, digital entrepreneur, philosopher and economist.