Detecting Regimes of Economic Growth With Fuzzy Concept-Based Models

Abstract

The paper presents a new method to detect economic growth regimes based on time-series similarity analysis. The procedure builds upon a fuzzy concept-based model, the Jaccard Index, and a hierarchical clustering procedure. Having introduced the proposed method, we apply it to the time series of economic growth and its proximate factors. Further, we study the stability of the obtained results under different parameters. The proposed procedure allows us to detect groups of countries that share a common growth performance and akin growth mechanisms. Simultaneously, the method let us identify countries that escape any fixed classifications.INDEX TERMS Concept-based models, economic growth, growth regime, fuzzy sets.