DEA model for optimising economic policies of European Union countries
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https://doi.org/10.17979/ejge.2026.15.1.12116Abstract
This study focuses on the problem of optimal choice between unemployment and inflation in view of the international position of the country. The proposed DEA model was tested on the example of statistics of European Union countries for 2023. This year, the efficient frontier of countries' states (the international Phillips DEA line) was formed by the Czechia, Germany, the Netherlands and Belgium. National Phillips DEA lines were built by parallel moving of the international frontier. Optimal states were determined by minimising the quadratic social loss function. A point with minimum indicator levels (the “ideal” state) was the centre of social loss curves. Deviations of actual states from the “ideal” one were normalised by dividing by the difference in coordinates of this state and the binomial mean point of efficient countries. According to the proposed optimisation efficiency coefficient, the best strategy for Bulgaria, Ireland, Malta and Slovenia would be to move directly to the state of the international optimum. Germany and the Netherlands would not benefit from optimising their state. The proposed model can be used in countries' economic policies and their ranking.
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References
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