A Fuzzy Logic Approach to Modelling the
Indian Underground Economy

S. Kayalvizhi; T. Gunasekar; S. Thenmozhi

doi:https://doi.org/10.14445/22315373/IJMTT-V39P513

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 39 | Number 2 | Year 2016 | Article Id. IJMTT-V39P513 | DOI : https://doi.org/10.14445/22315373/IJMTT-V39P513

A Fuzzy Logic Approach to Modelling the Indian Underground Economy

S. Kayalvizhi, T. Gunasekar, S. Thenmozhi

Citation :

S. Kayalvizhi, T. Gunasekar, S. Thenmozhi, "A Fuzzy Logic Approach to Modelling the Indian Underground Economy," International Journal of Mathematics Trends and Technology (IJMTT), vol. 39, no. 2, pp. 94-98, 2016. Crossref, https://doi.org/10.14445/22315373/IJMTT-V39P513

Abstract

The availability of data for the size of the “Indian Underground Economy” is important for macroeconomic policy. We use fuzzy set theory and fuzzy logic to construct an annual time-series for the Indian underground economy over the period 2010 to 2016. Two input variables are used – the effective tax rate and an index of the degree of regulation. The resulting underground economy, time-series is compared with one previous a structural “Multiple Indicators, Multiple Causes” (MIMIC) model. The two approaches each yield sensible, but somewhat different, pictures of the India underground economy over this period. The fuzzy logic approach to this measurement problem involves several subjective judgements, but our results are quite robust to these choices.

Keywords

Fuzzy Logics, Modelling, Time series, Multiple Indicators.

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