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The Assessment of Economic Performance of OECD Countries—Factor Analysis and Cluster Analysis

This paper studies the economic performance of 19 OECD countries. Eight economic variables are selected to describe the economic performance which are incorporated into two factors afterwards by factor analysis. The relations among the variables and that between factors and variables are analysed. A comparative study is made, based on the factor scores of these 19 countries; and the countries are classified into 5 categories using cluster analysis, according to their similarities in the variables and the extracted factors. The common characteristics of the countries with similar economic performances on the two factors are discussed. The paper presents an outline of the nations’ economic performance during this period. It is quite interesting, as a by-product finding, that the countries sharing the economy similarities also have the geographical communalities.