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Economic and Financial Vulnerability: Proposal for a Multidimensional Index through Dimensionality Reduction

Year: 2025

Type: article

Abstract: Economic and financial vulnerability (EFV) is a condition that affects the macroeconomic stability of countries, especially in emerging economies, in the face of external or internal shocks. This paper proposes the construction of a multidimensional FEV index using dimensionality reduction techniques, particularly Principal Component Analysis (PCA). Based on data from Latin American countries in the period 2018–2023, a synthetic index is constructed that summarizes key variables such as public debt, inflation, international reserves, trade balance, among others. The results allow countries to be classified according to their level of vulnerability, facilitating decision-making for the design of public policies aimed at economic resilience.

Source: Journal of Posthumanism

DOI: 10.63332/joph.v5i6.2547

Authors: Gilbert Adrian Anazco Campoverde, Norma Patricia Jimenez Vargas, Rosa de Lourdes Acosta Velarde, Eric Salinas Mayne, Alexandra Lorena Lopez Naranjo

Institutions: Universidad Tecnica de Machala, Universidad Nacional de Chimborazo, Universidad Andrés Bello

Language: English

Topic: Global Financial Crisis and Policies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: diamond

OpenAlex ID: W4411427183

FWCI:

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