Modelling and Analysis of Socio-Economic Development of the European Union Countries through the DP2 Method

Abstract

Further positive social and economic development (SED) requires modelling and analysis for evaluating its results to ground directions for future development. The purpose of the paper is to study the problem of estimating of SED, to form the methodology for modelling its results and to create an aggregated econometric indicator within the framework of unified conceptual approach for the European Union (EU) countries. To achieve this goal, it is necessary to solve the following objectives: to determine the essence of the concept of SED, to study traditional approaches to measure SED, to give an overview of the DP2 modelling method, to discover and structure the elements of SED in the EU countries and to argue a conceptual approach to modelling its outcomes. The study is based on the method of mathematical modelling in economics based on Distance P2 method. Econometric modelling, as well as regression analyze, was used to develop a synthetic indicator DP2 for evaluating SED of the EU countries. Also, the research process was based on analysis, synthesis and the system approach for information processing, as well as on the method of comparative and statistical analysis, quality and quantity analysis. The results of the deep research showed that there is no unified approach to modelling SED. The Distance P2 method was first proposed to measure SED at the national level exactly for the EU. The methodology for measuring SED specifically for the EU countries based on the conceptual approach was developed and substantiated. Based on the proposed methodology and taking into account the special characteristics of the region studied - the social and economic DP2 indicator for the EU countries was created. This study proposes to build a synthetic indicator DP2 to model results of progress in SED, especially in the EU. The practical implications of the synthetic indicator DP2 for modelling and analysis of SED of the EU countries can be a prospect for further research. Applied aspect of these studies is advising the EU's public policy with the aim of advancing. Using the DP2 synthetic indicator of SED for the EU countries will identify and substantiate the main directions for developing the country's domestic policy to improve the quality of life of the populations. Also, the results of the study can be used for advisory purposes to develop and optimize the EU development strategy 2020-2030. The value and originality of the paper lie in further application of the methodology of modelling the SED of the EU countries through synthetic indicator DP2. This will expand opportunities for increasing the national economy’s efficiency, that is highly important in terms of increased international competition.