Deterministic trend cross-impact forecasting

Abstract

This work is part of a larger effort to develop a computer simulation model to forecast the behavior of the population-economy-welfare system of Israel for the 1974–1980 period. In the process of achieving this goal, a new technique was developed for the purpose of analyzing past trends and projecting them into the future. Using this technique, it is now possible to produce alternative future histories of social trends that are simultaneously extrapolated from the past and are interacting with each other. The methodology used in the model includes a combination of three well known forecasting techniques: trend extrapolation, cross-impact analysis, and system dynamics simulation. These are applied in an illustrative example to a simple five trend system consisting of: (1) Israeli population; (2) GNP; (3) government budget; (4) welfare and social security recipients; and, (5) welfare and social security payments. This exercise should demonstrate the ease of use and the broad applicability of the model. It would be a relatively routine matter to expand the system to include a larger number of societal trends. The result would be a more detailed and sophisticated description and simulation of the real world system under study.