In the loss function version PolTajka the loss function comprises
- four target variables: real gross domestic product growth, GDP price changes, unemployment rate and balance of current account as a percentage of the GDP in current prices.
- Different policy constellations are contrived by changing the target values and weights applied as coefficients when adding up the squared deviations of the target variables from their target values.
- One of the target value constellations is the latest Ministry of Finance forecast.
- Different weights are used for exceeding and remaining short of the target values.
The value of the loss function is the following sum of squares:
X = instrument value supplied by the user
X0 = initial value of the instrument
Y = target value calculated by the model
Y0 = target value of the target variable
v = weight of instrument
w = weight of the target variable