Abstract:The dynamic threshold model can constantly modify the threshold with the trend of the series.This paper uses this method to monitor and forewarn China's economic prosperity. Firstly, the paper chooses several prosperity indicators to construct a prosperity index to reflect real economic fluctuation, then converts the prosperity index into stationary series by the integral method, and determines the threshold value by POT model, finally obtains the dynamic threshold of the prosperity index. The results show that the dynamic threshold model can capture the extreme prosperity changes of China's economy and accurately judge the operating range of the prosperity, which is suitable for the monitoring and early warning of China's economy in the new era.
Keyword:dynamic threshold; POT model; monitoring and early warning;