Designing a contemporaneity index: Detecting regional similarities in South America, 1961-2018

Abstract

This study present an operational characterization of contemporaneity among variables based on the transformation of their corresponding time series into symbolic ones by applying either a Markov switching approach or the symbolic aggregate approximation method. Then, the authors extract vectors from the resulting symbolic time series, characterizing the pattern o f change or permanence in time. The scalar product between the vectors corresponding to two variables yields the index of contemporaneity between them. The study apply this method to detect a ranking of synchronic patterns of evolution of gross domestic product (GDP) and investment between several South American economies.