APPLICATION OF STOCHASTIC AND DETERMINISTIC MODELS IN ECONOMIC ANALYSIS.
Keywords:
Stochastic models, deterministic models, economic analysis, forecasting, optimization, probability theory, econometrics, policy evaluation, economic modeling, uncertainty.Abstract
Economic analysis is a critical field that employs mathematical and statistical models to understand and predict economic behavior, policy impacts, and market dynamics. Two major categories of models—stochastic and deterministic—serve distinct roles in economic research. Deterministic models assume certainty in their variables and offer precise, reproducible outcomes, while stochastic models account for randomness and uncertainty, making them essential for forecasting and risk assessment. This paper explores the theoretical foundations, applications, and comparative advantages of these models in economic analysis.
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