The Prediction for Shanghai Business Climate Index by Grey Model

Abstract

This study predicts Shanghai Business Climate Index from the third quarter of 2013 to the first quarter of 2014 by Grey Model. Business climate index (enterprise integrated production business index) is the judgments and expectations index to the development of an enterprise in the future. By comparing the forecasting accuracy of three grey models, i.e., GM (1, 1) model, Verhulst model and the DGM (2, 1) model, the results show that the forecasting accuracy of GM (1, 1) model is higher than Verhulst model and DGM (2, 1) model. And GM (1, 1) model is used to predict Shanghai business climate index in the next three quarters.