An Application of Factor Analysis in the Evaluation of Country Economic Rank

The economic parameters play an important role in economic growth and it also affects economic performance of a country. This paper described the basic principles of factor analysis, and used this method to perform a comprehensive analysis and evaluation of economic development of 20 countries on 21 economic parameters. The performance of our work is evaluated using IMF dataset for 20 countries and result shows the economic rank of countries (Kuwait, Germany, Iceland, Belgium, Denmark, Taiwan, Qatar, Ireland, Sweden, Luxemburg, Austria, Singapore, Norway, Netherland, Hong Kong, Brunei, us, Switzerland, Canada, and Australia). We saw that our calculated rank and the rank provided by world ranking list is almost same which confirms that it is successful to apply factor analysis into countries economic evaluation.