Grey Relational Analysis Based on Velocity and Acceleration and its Application

Based on existing grey relational degree models, in order to investigate the dynamic similarity of trends between sequences, we propose the grey relational model based on velocity and acceleration which measures the closeness of the rate of change. And then we discuss the nature of the rate of change of gray relational degree. This model can reflect the similarity of the relative change trend of time series. It has the characters of symmetry, uniqueness, comparability, and normativity, etc. Applied to the analysis of the correlation between consumer price index (CPI) and Economic Policy Uncertainty(EPU), and between the exchange rate and Economic Policy Uncertainty(EPU). The empirical results show that the correlation between the exchange rate and Economic Policy Uncertainty(EPU) is stronger, so we consider that the exchange rate has a great influence on EPU index, that means the exchange rate has more impact of actual macroeconomic variables.