The conditional density estimate as a method of empiric analysis and forecast of economic phenomena in the framework of probability modeling

This paper continues the development of the multi-dimensional density as alternative method of empiric investigation in the study of economics as a social phenomenon, defined and considered as a random event. The paper further develops the research of Tanku and Ceca (2013) by providing the tools and the metric of estimation method. The paper is based on the definition of the economy as a multi-dimensional random process and the estimation of the multi-dimensional joint probability function. The empirical relevance of the methodology is demonstrated by the reexamination of the relationship between money and inflation in the case of developed economy.