Sensitivity Model of Financial and Economic Performance Based on Hidden Markov Chain

Abstract

In this paper, the sensitivity model of financial and economic performance based on Hidden
Markov chain is proposed. In the existing literature, the scale indicators of financial
development conflict with each other, which affects the comparability of research conclusions
and the credibility of policy recommendations to a certain extent. Therefore, based on Hidden
Markov chain, this paper designs an index system to measure financial development from two
aspects of scale and efficiency. In this paper, cluster analysis and factor analysis are used to
evaluate the level of regional financial development, and then the role of financial development
in promoting regional economic growth is examined, and then the conclusions and policy
implications are given. This conclusion has a certain reference value for the study of financial
and economic performance sensitivity.