Forecasting of macroeconomic stability post-pandemic recovery: The case of European countries

Abstract

The unfolding of the COVID-19 pandemic has revealed "bottlenecks" not only in the healthcare system, which was unable to cope with a significant influx of patients and quickly eliminate the spread of coronavirus infection, but also the vulnerability of the socioeconomic systems of countries all over the world. The research aims to determine country-specific trend patterns of volatility of the integral level of macroeconomic stability and its components and forecast their values for the medium term to determine the dynamics of post-pandemic recovery. The implementation of the research objectives involves the implementation of the following steps: 1) determining outliers in data series that characterise the dynamics of the components of macroeconomic stability in the context of each of the 10 studied countries; 2) eliminating outliers; 3) determining the highest-quality functional form of the dependence of the change in the corresponding individual macroeconomic indicator over time; 4) forecasting the change in individual indicators and the integral level of macroeconomic stability for the medium term (2023-2025); 5) determining the deviations of the forecast values of the above indicators from their pre-pandemic level (2019) and end-of-pandemic level (2022); 6) qualitative interpretation of the forecasting results.