A gene expression programming model for economy growth using knowledge-based economy indicators: A comparison of GEP model and ARDL bounds testing approach

Abstract

Purpose

The purpose of this paper is to focus on modeling economy growth with indicators of knowledge-based economy (KBE) introduced by World Bank for a case study in Iran during 1993-2013.

Design/methodology/approach

First, for grouping and reducing the number of variables, Tukey method and the principal component analysis are used. Also for modeling, 67 per cent of data is used for training in the two approaches of ARDL bounds testing and gene expression programming (GEP) and 33 per cent of them for testing the models. Then, the result models are compared with fitness function and Akaike information criteria (AIC).

Findings

The GEP model with fitness 945.7461 for training data and 954.8403 for testing data from 1000 is better than ARDL bounds testing model with fitness 335.5479 from 1000. In addition, according to model comparison tools (AIC), the GEP model has an extremely larger weight in comparison with ARDL bounds model. Therefore, the GEP model is introduced for future use in academia.

Practical implications

Knowledge and information is one of the most basic sources of wealth in economists’ sight. Thus, using KBE indicators appears essential in economic growth regarding daily progress in knowledge processes and its different theories. It is also extremely important to determine an appropriate model for KBE indicators which play a highly important role in the allocation of the economic resources of the country in an optimal manner.

Originality/value

This paper introduced a novel expression for economy growth using KBE indicators. All the data and the indicators are extracted from Word Bank service between 1993 and 2013.

Citation

Ahmadi, M. and Taghizadeh, R. (2019), "A gene expression programming model for economy growth using knowledge-based economy indicators: A comparison of GEP model and ARDL bounds testing approach", Journal of Modelling in Management, Vol. 14 No. 1, pp. 31-48. https://doi.org/10.1108/JM2-12-2017-0130