Economic modelling and theory of fuzzy sets application in macroeconomic planning within the process of transition

The transition process from administrative to (mainly) market mechanisms of managing and regulating the economy is taking place under the conditions of intensive changes within internal and external surroundings. The structure of aims and actions, as well as the theoretical and data basis to describe this process is an extraordinarily complex system, having numerous feedbacks with different regulative mechanisms regarding their costs and effects. Within the process of formulating long-term economic policies, as the basic subset of the elements of macroeconomic planning, there is a certain arbitrariness in the selection of regulative mechanisms and in the estimation of their costs and effects. To a great extent, it is a consequence of the difficulties in defining appropriate economic models. Obviously, there is the need for formalized and systematic planning. The large number of inputs, followed by their mutual interactions producing outputs, cannot be quantified and presented in a classical way, but in a purely linguistic way, which is very suitable for improving conventional methods and models for the description of actual phenomena. The application of fuzzy sets has been advanced to treat imprecise and uncertain information. Fuzzy instruments can overcome the restrictions of classical quantitative methods when describing and defining problems of economic development, thus enabling a more exact approach to qualitative modeling.