Can a Decision Tree Forecast Real Economic Growth from Relative Depth of Financial Sector In Nigeria?

Bada Olatunbosun; Alabi Nurudeen Olawale

Can a Decision Tree Forecast Real Economic Growth from Relative Depth of Financial Sector In Nigeria?

Bada Olatunbosun * §

Contact

Alabi Nurudeen Olawale

Contact

§ Auchi Polytechnic, Auchi

Can a Decision Tree Forecast Real Economic Growth from Relative Depth of Financial Sector In Nigeria?

Article Fingerprint

ReserarchID

20XC2

Can a Decision Tree Forecast Real Economic Growth from Relative Depth of Financial Sector In Nigeria? Banner

AI TAKEAWAY

Connecting with the Eternal Ground

Abstract

We employed a decision tree statistical learning method which is lately gaining wide usage in the field of econometrics to establish the relationships between real gross domestic products growth rate and financial depth indicators such as stock market turnover ratio, credit to private sector (CPS) and broad money supply (M2) relative to gross domestic product (GDP) in Nigeria between 1981 to 2016. The data was divided into training and test datasets. The former was used to train the decision tree while the later was used to test the performance of the fitted decision tree model. Recursive binary splitting produced a fitted tree with nine nodes (leaves). This tree was pruned using cost complexity pruning procedure which uses a tuning parameter α to control the tradeoff between the tree complexity and overfitting the data. Pruning produced a tree with four terminal nodes and improved predictability in terms of lower model MSE on test dataset and interpretability. Bagging and Random Forest procedure were employed to further improve the performance of the model by aggregating bootstrapped training samples in order to reduce the variance.

References

16 Cites in Article

Reference Format

Tibshirani Hastie Trevor,Friedman Robert,Jerome (2008). Elements of Statistical Learning, Data Mining, Inference and Prediction, Second Edition.
Ratna Sahay,Martin Cihak,Papa N'diaye,Adolfo Barajas,Diana Ayala Pena,Ran Bi,Yuan Gao,Annette Kyobe,Lam Nguyen,Christian Saborowski,Katsiaryna Svirydzenka,Reza Yousefi (2015). Rethinking Financial Deepening: Stability and Growth in Emerging Markets.
King Robert,Ross Levine (1993). Finance and Growth: Schumpeter Might Be Right.
R Levine,S Zervos (1998). Stock Markets, Banks and Economic Growth.
Ross Levine,Norman Loayza,Thorsten Beck (2000). Finance and the Sources of Growth.
Kularatne Chandana (2001). An examination of the impact of financial deepening on long-run economic growth: An application of a VECM structure to a middle-income country context, Trade and Industrial Policy Strategies.
Thorsten Beck,Ross Levine (2004). Stock Markets, Banks and Growth: Panel Evidence.
Berentsen Aleksander,Shi Shouyong (2008). Financial deepening and its determinants.
Chang Shu-Chen,Wu Cheng-Hsien (2012). The Relationship between Financial Deepening and Economic growth in Taiwan.
Jeremy Greenwood,Sanchez Juan,M,Wang Cheng (2012). Quantifying the Impact of Financial development on economic development.
Ardic Oya Pinar,H Damar,Evren (2006). Financial Sector Deepening and Economic Growth.
Adekunle Olusegun,Salami Ganiyu,O,Adedipe Oluseyi (2013). Financial Deepening, Financial Intermediation and Nigerian Economic Growth: Time Variant Analysis.
Aye Goodness,C (2013). Causality between financial deepening, economic growth and poverty in Nigeria.
Aye Goodness,C (2015). Causality between Financial Deepening and Economic Growth in Nigeria.
Oriavwote Victor,E,Eshenake Samuel,J (2014). An empirical assessment of financial sector development and economic growth in Nigeria.
Team Core (2018). R: A language and environment for statistical computing.

Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Bada Olatunbosun, Alabi Nurudeen Olawale. 2018. "Can a Decision Tree Forecast Real Economic Growth from Relative Depth of Financial Sector In Nigeria?". Global Journal of Science Frontier Research - F: Mathematics & Decision GJSFR-F Volume 18 (GJSFR Volume 18 Issue F4).

More Citation Formats

Select Citation Style:

Download Citation

GJSFR Volume 18 Issue F4

Explore Journals Explore Volume Read This Issue

Journal Specifications

Crossref Journal DOI 10.17406/GJSFR

Print ISSN 0975-5896

e-ISSN 2249-4626

Keywords

Not Found

Classification

GJSFR-F Classification MSC 2010: 62P05

Submission ReceivedMay 11, 2018
Peer Review Double Blind
Handling Editor
Accepted June 5, 2018
Published June 17, 2018

Version of record

v1.2

Issue date

June 7, 2018

Language

English

Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR

Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D

Article Matrices

Total Score: 146

Country: Nigeria

Subject: Global Journal of Science Frontier Research

Authors: Alabi Nurudeen Olawale, Bada Olatunbosun (PhD/Dr. count: 0)

View Count (all-time): 296

Total Views (Real + Logic): 719

Total Downloads (simulated): 53

Publish Date: 2018 06, Sun

Monthly Totals (Real + Logic):

Month 1: 39 views
Month 2: 49 views
Month 3: 33 views
Month 4: 23 views
Month 5: 38 views
Month 6: 40 views
Month 7: 31 views
Month 8: 15 views
Month 9: 34 views
Month 10: 36 views
Month 11: 29 views
Month 12: 31 views
Month 13: 31 views
Month 14: 25 views
Month 15: 13 views
Month 16: 19 views
Month 17: 19 views
Month 18: 27 views
Month 19: 14 views
Month 20: 15 views
Month 21: 32 views
Month 22: 45 views
Month 23: 30 views
Month 24: 35 views
Month 25: 27 views
Month 26: 30 views
Month 27: 18 views
Month 28: 27 views
Month 29: 43 views
Month 30: 26 views
Month 31: 33 views
Month 32: 35 views
Month 33: 28 views
Month 34: 43 views
Month 35: 17 views
Month 36: 23 views
Month 37: 43 views
Month 38: 31 views
Month 39: 15 views
Month 40: 22 views
Month 41: 37 views
Month 42: 25 views
Month 43: 29 views
Month 44: 30 views
Month 45: 23 views
Month 46: 26 views
Month 47: 24 views
Month 48: 34 views
Month 49: 17 views
Month 50: 27 views
Month 51: 29 views
Month 52: 22 views
Month 53: 19 views
Month 54: 21 views
Month 55: 23 views
Month 56: 18 views
Month 57: 39 views
Month 58: 18 views
Month 59: 18 views
Month 60: 39 views
Month 61: 28 views
Month 62: 47 views
Month 63: 43 views
Month 64: 20 views
Month 65: 39 views
Month 66: 41 views
Month 67: 47 views
Month 68: 28 views
Month 69: 20 views
Month 70: 39 views
Month 71: 24 views
Month 72: 25 views
Month 73: 36 views
Month 74: 39 views
Month 75: 34 views
Month 76: 40 views
Month 77: 33 views
Month 78: 34 views
Month 79: 32 views
Month 80: 21 views
Month 81: 31 views
Month 82: 35 views
Month 83: 42 views
Month 84: 32 views
Month 85: 38 views
Month 86: 46 views
Month 87: 21 views
Month 88: 41 views
Month 89: 39 views
Month 90: 20 views
Month 91: 24 views
Month 92: 19 views
Month 93: 46 views
Month 94: 38 views
Month 95: 53 views
Month 96: 51 views
Month 97: 40 views
Month 98: 65 views
Month 99: 37 views
Month 100: 44 views

Total Views: 719

Total Downloads: 53

All Trends