AI Economics Research Podcast

This episode breaks down a recent Bank of England working paper, exploring the best econometric methods for accurately estimating structural parameters in complex economic models. We demystify Local Projections (LP) versus Vector Autoregressions (VAR), and compare Impulse Response Function (IRF) matching with Indirect Inference. Discover why Indirect Inference is often the more robust and reliable...

This episode delves into a groundbreaking research paper from the Bank for International Settlements, exploring how artificial intelligence is being harnessed to monitor and predict financial market stress. We break down a novel approach that combines recurrent neural networks (RNNs) to forecast market dysfunction with large language models (LLMs) to explain the underlying drivers. Discover how th...

This episode delves into a Bank of England research paper exploring how machine learning is being applied in central banking and policy analysis. We break down complex AI concepts into plain English, showing how tools like neural networks are used for economic forecasting, financial regulation, and understanding market trends. Discover the future of data-driven decision-making at institutions vita...

This episode dives into a new Bank for International Settlements (BIS) research paper investigating Artificial Intelligence (AI) adoption across European firms. Learn how AI boosts labor productivity by 4% without displacing jobs in the short term, primarily through 'capital deepening.' We explore the uneven distribution of these gains, the role of complementary investments, and the critical impli...

This episode delves into a new research paper from the Bank for International Settlements, exploring how the lightning speed of high-frequency trading (HFT) influences the cost of capital for companies. We uncover how HFT can paradoxically raise capital costs for some stocks by amplifying systematic risk, while simultaneously reducing it for others through improved liquidity. Discover the crucial...

This episode breaks down a Bank of England research paper that significantly improves economic forecasting methods. It explains how economists use advanced statistical models, factor augmentation, and account for asymmetric loss and volatility to create more accurate predictions. Tune in to understand how these sophisticated adjustments enhance forecast performance across a range of economic varia...

This episode breaks down a Bank of England Staff Working Paper, explaining how economists use advanced statistical models called Bayesian Vector Autoregressions (VARs). Discover how these powerful tools help central bankers and researchers forecast key economic and financial variables and understand the impact of policies like interest rate changes. This episode explains a real academic paper in p...

This episode dives into a Bank of England Staff Working Paper exploring how machine learning techniques can enhance macroeconomic forecasting. We break down the paper's findings on using diverse data sources, from traditional surveys to text-based indicators from news articles, to predict economic activity. Discover which models and data combinations yield the most accurate predictions and why the...

This episode unpacks a recent Bank of England research paper on the often-overlooked 'fragility' of deep learning models in finance. We explore how subtle changes can cause AI to give vastly different *explanations* for its decisions, even when predictions are identical. Discover the significant implications this has for financial stability, risk management, and regulatory practices. This episode...

This episode breaks down a Bank of England research paper on using interpretable machine learning for economic forecasting. Discover how advanced AI models can outperform traditional methods by uncovering complex, time-varying relationships in data, specifically demonstrated through forecasting US unemployment. We explain how a new workflow makes these powerful predictions transparent and actionab...

This podcast episode explains groundbreaking Bank of England research uncovering the financial mechanics behind Britain's 1833 slavery abolition compensation. Delve into newly analyzed archival data to understand who truly benefited from the £20 million payout to slave-owners, revealing the crucial role of London's financial institutions and intermediaries in quickly monetizing these government as...

This episode explores a Federal Reserve Bank of New York research paper on the economic effects of legalizing mobile sports betting. We unpack how betting and consumer credit distress can spill across state borders, impacting credit scores and delinquency rates, especially for younger individuals. Understand the fiscal asymmetry created for states that haven't legalized, bearing costs without the...

This episode dives into how ordinary households form their views on inflation, revealing a surprising truth: changes in food prices matter most. Discover why the cost of your groceries profoundly influences collective inflation expectations across all demographics, more so than even energy prices. This research offers crucial insights for central banks in understanding and predicting persistent in...

New research reveals that rising global temperatures are significantly increasing the costs of international trade, a factor largely overlooked in climate impact assessments. This study combines historical trade and weather data to show how climate change, particularly through its effects on sea ports, makes shipping goods more expensive. Discover how ignoring this trade cost channel leads to a su...

This episode delves into new research exploring the Phillips curve, a key model linking inflation and economic slack. Using extensive firm-level survey data from the UK and US, economists uncover compelling evidence that the Phillips curve is convex, meaning prices respond differently to positive versus negative demand shocks. This non-linear relationship has significant implications for central b...

Recovered episode

Recovered episode

Recovered episode