Designing Customized Hierarchical Fuzzy Logic Systems for Modelling and Prediction

In this paper the design and development of a hierarchical fuzzy logic Systems are investigated. A new method using genetic algorithms for design of hierarchical fuzzy logic systems are proposed. This research study is unique in the way proposed method is applied to design and development of hierarchical fuzzy logic systems. The proposed method is then applied to financial modelling and prediction. A hierarchical fuzzy logic system is developed to predict quarterly interest rates in Australia. The new method proposed determines the number of layer in a hierarchical fuzzy logic system. The advantages and disadvantages of using hierarchical fuzzy logic systems for financial modelling is also considered. Good prediction of quarterly interest rate in Australia is obtained using the above method. The number of fuzzy rule used are reduced dramatically and prediction of interest rate is improved.