Naslov
SIGNIFICANCE OF MONTE CARLO SIMULATION IN PREDICTION OF ECONOMIC PROJECTIONS: A CRITICAL REVIEW

Autori
Bestvina Bukvić, Ivana

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
ECONOMIC AND SOCIAL DEVELOPMENT (ESD 2019) / Hammes, K ; Machrafi, M ; Samodol, A - Rabat : VADEA, 2019, 221-230

Skup
38th International Scientific Conference on Economic and Social Development38th International Scientific Conference on Economic and Social Development

Mjesto i datum
Rabat, Maroko, 21.03.2019. - 22.03.2019

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
capital budgeting ; Monte Carlo method ; stochastic risk analysis ; industry sectors forecast ; IT sector development projections

Sažetak
In the evaluation of capital investments, the Monte Carlo stochastic method enables combining the potential values of numerous key factors which could be in the complex and interconnected relation and therefore give the insight of possible future investment project outcomes. By the earlier studies, it was found that despite its usefulness it is still not widely used in practice, especially in evaluating possible outcomes of economic forecasts. This is a surprising fact, considering the effects of the recent economic crisis, among other, on the results of implemented investment projects, business performance, industrial sectors and overall economy. The objective of this paper is to analyze whether there is a significant number of examples and research of its application in the evaluation of projections of individual industry sectors future development with an emphasis on the IT sector. The author conducted an analysis of available literature and surveys on this topic. The work is structured from two separate parts -first analysis of literature working on definition and correlation of risk, uncertainty and the Monte Carlo simulation in business decision-making and the second the analysis of literature dealing with its applicability in practice. It was found that the Monte Carlo method is considered as a method that provides specific and relevant information in the process of decision-making regarding the project implementation, but considering its specificity and in combination with other methods of assessing project investment. At the other hand, it is rarely used in the analysis of the economic forecast of specific industrial sectors.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA