Early-Warning of Financial Crises Based on Fuzzy Logic
نویسندگان
چکیده
The paper discusses the application of fuzzy logic and fuzzy inference systems (FIS) as an effective tool for alerting decision makers of impending economic crises. Following a promising literature-based approach, we build an experimental system model for validation on credit growth and housing market historical data. The system is subsequently applied using the two key economic indicators for Romania between 2005 and 2013. Results are presented and necessary conclusions are drawn as well as challenges in carefully designing the fuzzy system in order to adapt it to emerging market conditions. Also an adaptive weighting method is implemented in order to fine tune the overall behaviour of the proposed system.
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