Machine Learning and Causality: The Impact of Financial Crises on Growth

by Mr.Andrew J Tiffin

Author	: Mr.Andrew J Tiffin
Publisher	: International Monetary Fund
Total Pages	: 30
Release	: 2019-11-01
Genre	: Computers
ISBN	: 1513518305

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Machine learning tools are well known for their success in prediction. But prediction is not causation, and causal discovery is at the core of most questions concerning economic policy. Recently, however, the literature has focused more on issues of causality. This paper gently introduces some leading work in this area, using a concrete example—assessing the impact of a hypothetical banking crisis on a country’s growth. By enabling consideration of a rich set of potential nonlinearities, and by allowing individually-tailored policy assessments, machine learning can provide an invaluable complement to the skill set of economists within the Fund and beyond.

Powering the Digital Economy: Opportunities and Risks of Artificial Intelligence in Finance

by El Bachir Boukherouaa

Author	: El Bachir Boukherouaa
Publisher	: International Monetary Fund
Total Pages	: 35
Release	: 2021-10-22
Genre	: Business & Economics
ISBN	: 1589063953

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This paper discusses the impact of the rapid adoption of artificial intelligence (AI) and machine learning (ML) in the financial sector. It highlights the benefits these technologies bring in terms of financial deepening and efficiency, while raising concerns about its potential in widening the digital divide between advanced and developing economies. The paper advances the discussion on the impact of this technology by distilling and categorizing the unique risks that it could pose to the integrity and stability of the financial system, policy challenges, and potential regulatory approaches. The evolving nature of this technology and its application in finance means that the full extent of its strengths and weaknesses is yet to be fully understood. Given the risk of unexpected pitfalls, countries will need to strengthen prudential oversight.

Fiscal Crises

by Mrs.Kerstin Gerling

Author	: Mrs.Kerstin Gerling
Publisher	: International Monetary Fund
Total Pages	: 43
Release	: 2017-04-03
Genre	: Business & Economics
ISBN	: 1475592159

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A key objective of fiscal policy is to maintain the sustainability of public finances and avoid crises. Remarkably, there is very limited analysis on fiscal crises. This paper presents a new database of fiscal crises covering different country groups, including low-income developing countries (LIDCs) that have been mostly ignored in the past. Countries faced on average two crises since 1970, with the highest frequency in LIDCs and lowest in advanced economies. The data sheds some light on policies and economic dynamics around crises. LIDCs, which are usually seen as more vulnerable to shocks, appear to suffer the least in crisis periods. Surprisingly, advanced economies face greater turbulence (growth declines sharply in the first two years of the crisis), with half of them experiencing economic contractions. Fiscal policy is usually procyclical as countries curtail expenditure growth when economic activity weakens. We also find that the decline in economic growth is magnified if accompanied by a financial crisis.

Global Waves of Debt

by M. Ayhan Kose

Author	: M. Ayhan Kose
Publisher	: World Bank Publications
Total Pages	: 403
Release	: 2021-03-03
Genre	: Business & Economics
ISBN	: 1464815453

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The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Data Science for Economics and Finance

by Sergio Consoli

Author	: Sergio Consoli
Publisher	: Springer Nature
Total Pages	: 357
Release	: 2021
Genre	: Application software
ISBN	: 3030668916

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This open access book covers the use of data science, including advanced machine learning, big data analytics, Semantic Web technologies, natural language processing, social media analysis, time series analysis, among others, for applications in economics and finance. In addition, it shows some successful applications of advanced data science solutions used to extract new knowledge from data in order to improve economic forecasting models. The book starts with an introduction on the use of data science technologies in economics and finance and is followed by thirteen chapters showing success stories of the application of specific data science methodologies, touching on particular topics related to novel big data sources and technologies for economic analysis (e.g. social media and news); big data models leveraging on supervised/unsupervised (deep) machine learning; natural language processing to build economic and financial indicators; and forecasting and nowcasting of economic variables through time series analysis. This book is relevant to all stakeholders involved in digital and data-intensive research in economics and finance, helping them to understand the main opportunities and challenges, become familiar with the latest methodological findings, and learn how to use and evaluate the performances of novel tools and frameworks. It primarily targets data scientists and business analysts exploiting data science technologies, and it will also be a useful resource to research students in disciplines and courses related to these topics. Overall, readers will learn modern and effective data science solutions to create tangible innovations for economic and financial applications.

The Impact of Gray-Listing on Capital Flows: An Analysis Using Machine Learning

by Mizuho Kida

Author	: Mizuho Kida
Publisher	: International Monetary Fund
Total Pages	: 37
Release	: 2021-05-27
Genre	: Business & Economics
ISBN	: 1513582437

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The Financial Action Task Force’s gray list publicly identifies countries with strategic deficiencies in their AML/CFT regimes (i.e., in their policies to prevent money laundering and the financing of terrorism). How much gray-listing affects a country’s capital flows is of interest to policy makers, investors, and the Fund. This paper estimates the magnitude of the effect using an inferential machine learning technique. It finds that gray-listing results in a large and statistically significant reduction in capital inflows.

Kingdom of Lesotho

by International Monetary Fund. African Dept.

Author	: International Monetary Fund. African Dept.
Publisher	: International Monetary Fund
Total Pages	: 18
Release	: 2024-09-11
Genre	:
ISBN	:

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Kingdom of Lesotho: Selected Issues

Prediction, Learning, and Games

by Nicolo Cesa-Bianchi

Author	: Nicolo Cesa-Bianchi
Publisher	: Cambridge University Press
Total Pages	: 4
Release	: 2006-03-13
Genre	: Computers
ISBN	: 113945482X

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This important text and reference for researchers and students in machine learning, game theory, statistics and information theory offers a comprehensive treatment of the problem of predicting individual sequences. Unlike standard statistical approaches to forecasting, prediction of individual sequences does not impose any probabilistic assumption on the data-generating mechanism. Yet, prediction algorithms can be constructed that work well for all possible sequences, in the sense that their performance is always nearly as good as the best forecasting strategy in a given reference class. The central theme is the model of prediction using expert advice, a general framework within which many related problems can be cast and discussed. Repeated game playing, adaptive data compression, sequential investment in the stock market, sequential pattern analysis, and several other problems are viewed as instances of the experts' framework and analyzed from a common nonstochastic standpoint that often reveals new and intriguing connections.

Fiscal Policy and Long-Term Growth

by International Monetary Fund

Author	: International Monetary Fund
Publisher	: International Monetary Fund
Total Pages	: 257
Release	: 2015-04-20
Genre	: Business & Economics
ISBN	: 1498344658

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This paper explores how fiscal policy can affect medium- to long-term growth. It identifies the main channels through which fiscal policy can influence growth and distills practical lessons for policymakers. The particular mix of policy measures, however, will depend on country-specific conditions, capacities, and preferences. The paper draws on the Fund’s extensive technical assistance on fiscal reforms as well as several analytical studies, including a novel approach for country studies, a statistical analysis of growth accelerations following fiscal reforms, and simulations of an endogenous growth model.