Dynamic Biplot. Evolution of the Economic Freedom in the European Union

Abstract

This paper presents a new method called 'Dynamic Biplot' that applies to the representation of 3way data. The Dynamic Biplot method is undertaken in two stages: First, it carries out a biplot analysis of the situation that is considered more representative in our analysis, the reference situation (static analysis); in the second stage, the rest of the situations are represented onto the analysis (dynamic analysis), obtaining trajectories of individuals and variables. The Dynamic Biplot method is used to analyse the evolution of the economic freedom in the European Union. The main results are that the countries outside the euro zone enjoy greater economic freedom and the Rule of law area (Property Rights and Freedom from Corruption) are the ones that better discriminate EU countries. To provide operational support to the Dynamic Biplot, it has developed a package in R and it has been applied to describe the evolution of the economic freedom in the EU.