Grey Relational Analysis Based Ranking of Latin American and Caribbean Economies

Abstract

The countries of Latin America and Caribbean have had a modest performance in terms of economic growth since 2000. In addition, Latin America and the Caribbean has also been characterized as a region with a level of macroeconomic volatility much higher than developed economies. From this point of view, the aim of this study is to evaluate the economic performance of Latin American and Caribbean countries during 2003-2013 periods. 13 countries namely Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico, Panama, Peru, Uruguay, Venezuela with highest GDP hold a position of importance in the Region. Grey Relational Analysis is used for the outranking of countries using macroeconomic indicators including total investment, gross national savings, inflation, average consumer prices, volume of imports of goods and services, volume of exports of goods and services, unemployment rate, general government revenue, general government total expenditure, general government gross debt, current account balance, gross product domestic (constant). Also annual macroeconomic indicators are converted to single data set by using arithmetic mean and weighted arithmetic mean (to be focused on recent years). This combined data was also used for another economic performance evaluation. The results of the empirical analyses show that Mexico and Dominican Republic ranked as first and second. The growth in these countries was robust, lifted by strengthening activity in the United States. In contrast, Argentina, Bolivia and Venezuela were at the bottom. These countries encountered difficulties maintaining sustained growth.