Modelling Economic Growth – Advanced Sequencing and Forecasting Algorithm (MEGASFORA)


The main objective of the project is to give a scientifically based answer to the questions “What are the causes of economic growth?” and “Whether economic growth can be forecasted and business cycles predicted?” A practical objective of the proposed research project is to build an optimal economic growth/cycle model using Advanced Growth Sequencing and Forecasting Algorithm (AGSIFAL) that we plan to build.

Projekt je financiran sredstvima Hrvatske zaklade za znanost

In order to do so, an algorithm (selected from the best of artificial neural network model, structural econometric model, dynamic general equilibrium model, nonlinear econometric model, golden triangle model) for cycle/growth sequencing and forecasting will be developed. Sequencing of the economic growth on an international scale (119 countries) will be performed using business cycle tracer methods and novel golden triangle model developed by Škare (2010). Using individual country data, we plan to isolate growth determinants using three dimensional golden triangle model and spectral analysis techniques. Output, inflation and employment form the three dimension of the cycle/growth triangle that will be used for sequencing growth. After growth sequencing is finished, a best forecasting algorithm is built. Pairing isolated growth bases help us to rebuild a growth. Using different algorithm models, reconstructed economic growth series is compared to the actual growth series (observed data). Algorithm resulting in the smallest forecast error (RMSE) is selected as optimal to explain economic growth and predict business cycles. Economic growth forecast and business cycles predictions will be compared to the actual data over the observation period. If data match poorly actual observed data on economic growth/cycles this signify economic growth follow random walk that cannot be predicted. Consequently, business cycles can not be avoided. This conclusion will have important theoretical and policy implications both for the science of economics and economic agents.

Project duration: 16 June 2014 – 15 June 2018

Call number: IP-11-2013

Principal investigator: Professor Marinko Škare


  • Professor Marinko Škare, principal investigator
  • Professor Valter Boljunčić
  • Professor Guglielmo Maria Caporale
  • Professor Steve Keen
  • Professor Nawazish Mirza
  • Professor Soumitra Sharma
  • Professor Hazbo Skoko
  • Professor Tomasz Wolowiec
  • Roman Semko
  • Professor Manuel Benazić
  • Mieta Bobanović
  • Sanja Blažević Burić
  • Tea Golja
  • Tea Hasić
  • Katarina Kostelić
  • Sabina Lacmanović
  • Romina Pržiklas Družeta
  • Danijela Rabar
  • Dean Sinković
  • Saša Stjepanović
  • Daniel Tomić


On Thursday, 16 June 2016, Faculty of Economics and Tourism "Dr. Mijo Mirković" hosted one-day international scientific conference titled "Latin America in the post-neoliberal era: Prospects for a sustainable and equitable transition". Conference was organized in collaboration with the University of St. Mary of Halifax in Canada. The conference is also linked to the project entitled "Modelling Economic Growth - Advanced Sequencing and Forecasting Algorithm" (MEGASFORA) which is financed by the Croatian Science Foundation. Economists from six countries presented ten excellent papers on the economic development models of the countries of South America. Papers will be published in a special issue of the international scientific journal "Economic Research" which is published in partnership with the publishing house Taylor & Francis. The theme is attractive, because in the last 10-15 years every country in South America opted for a different model of development and economic policy, but with a common historical context of leaving the neo-liberal economic principles. Pula-SMU-program.pdf
One of the most influential economists today, professor Ha-Joon Chang will be our visiting professor. Prof. Chang is the author of numerous scientific articles and popular books, one of which stands out: Kicking Away the Ladder: Development Strategy in Historical Perspective. In addition to a series of meetings with professor, professor Chang will give a lecture (open to the public) "Economics, but not as you know it".
From 29th June until 6th July team members of MEGASFORA project will organize a joint workshop on business cycles and its effects on economic growth. This workshop is an important activity for MEGASFORA team because it represents an incentive to create a stronger collaboration and a possibility to plan future research steps in detail. Financial System and Business Cycles.pptx Semko_DSGE_Webinar_1_part1_v4.pptx Semko_Econometrics_Webinar_2.pdf



Sanja Blažević Burić,


This project is fully supported by Croatian Science Foundation under the project number 9481