Authors: Sai Venkatesh Balasubramanian
The Annual Growth Rate of Gross Domestic Product of an economy is often seen as a key indicator to the economy’s growth and prosperity. In the present work, nonlinear analysis is performed on the GDP growth data of nations and supranational entities using two key tools, namely Averaged Lyapunov Exponent (ALE) and Distance Plot. The analyses ascertain the presence of chaos in the GDP growth rate data for both nations and supranational entities. Following this, some key inferences from the nonlinear analysis are presented, such as the high value of ALE obtained for fragile and conflict ridden economies, indicating the relationship between ALE and instability, the ALE analysis of BRICS nations as well as low ALE values of supranational entities such as OECD and EU. It is opined that the obtained results pave the way for unlocking a wealth of information regarding GDP growth rates ushering in a new era of ‘Smart Economics’.
Comments: 15 Pages.
[v1] 2015-10-27 21:25:25
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