Markov Chain: Forecasting Economic Variables

Abstract

The Economy is affected by dynamic and unstable variables. Therefore, it is very necessary to recognize the variations of the economic variables in order to make better decisions in the future via forecasting. In our work, a Markov Chain model, which is a mathematical tool in the stochastic Process, to forecasting some vital economic variables in making a critical decision was engaged. We proposed a forecasting model, based on Markov chains.