Assessing Similarities of Business Cycles with Fuzzy Concept-Based Models

The article analyses the similarity of business cycles among European Union countries. For this purpose, we design a new method – a fuzzy concept-based model, operating on time-series windows. We showcase the capability of the tool to detect similarities in the phase and the amplitude of the cycle, and we compare it with the commonly used measure of synchronization, i.e., with the correlation of business cycles. On the methodological level, the new method uses fuzzy clustering and various similarity measures. An application of the proposed method lets us revisit the co-movements of the cycles in the EU.