GM(1,1) Model Improvement and Application

Abstract

With the rapid of economic development,the forecast of economic has been a necessary method.We choice the gray model to predict the development of the economy in this paper.However,there are some short coming in the traditional GM(1,1) model.Always,we can't get what we want when the data vary widely,the prediction accuracy is not.Firstly,the GM(1,1)model to do a brief introduction and then improved the smoothness of the initial value and the value of the background value optimization model,and finally we use of the improved model to predict the economic development in the next few years of Lanzhou.We can see that the GDP of Lanzhou will reach 600 bilion in the year of 2020 from the forecast.