Part of the uncertainty and anxiety caused by inflation is the lack of real-time values. We know that at the end of the September quarter, NZ inflation was 7.2%. The RBNZ suggested that we have reached the peak and inflation will fall soon, but unless we know today’s value, we have no idea if this is true.
To finally add real-time data to the important inflation discussion, my team at Massey’s Knowledge Exchange Hub yesterday launched the NZ Live Inflation Tracker (gdplive.net). This publicly available AI-powered tool uses daily industry data to track inflation in real-time.
Our tool uses huge amounts of data. Every night, we receive information about the previous day’s financial transactions in the economy. We have trained software to analyse that data and distil key economic figures from it.
In this way, we can estimate not what GDP or inflation were last month or in the last quarter. We know with a high degree of precision what these figures were yesterday.
With our tool, we know how the economy is ticking. We can then also track the Reserve Bank’s cash rate against what a Taylor Rule would recommend.
Real-time inflation and optimal OCR values will remove uncertainty about our economy’s health and increase accountability. Go and check out these new tools that we have added to our live GDP tracker (national, regional and industry), and you might be surprised at what you see. The rise of inflation is slowing down, and today tracks at 7.3%, suggesting that we haven’t reached the peak yet. To contain inflation, a Taylor Rule would have our OCR at 7.4% but it currently sits at less than half this value.
Our current quarterly GDP growth is lower than expected, but the rise of inflation is slowing down. However, my biggest concern is the record-high gap between our current OCR and where it should be to get a grip on inflation. If you don’t believe me, see for yourself (Gap to optimal OCR tracker on gdplive.net). It puts the reappointment of our Reserve Bank Governor in a different light.
Christoph is a Professor of Innovation and Economics at Massey University, the Director of the Knowledge Exchange Hub (Massey University's big data-driven research centre) and the ambassador for Australia and New Zealand of the Kronberg Academy (Germany). This article was first published HERE
Our tool uses huge amounts of data. Every night, we receive information about the previous day’s financial transactions in the economy. We have trained software to analyse that data and distil key economic figures from it.
In this way, we can estimate not what GDP or inflation were last month or in the last quarter. We know with a high degree of precision what these figures were yesterday.
With our tool, we know how the economy is ticking. We can then also track the Reserve Bank’s cash rate against what a Taylor Rule would recommend.
Real-time inflation and optimal OCR values will remove uncertainty about our economy’s health and increase accountability. Go and check out these new tools that we have added to our live GDP tracker (national, regional and industry), and you might be surprised at what you see. The rise of inflation is slowing down, and today tracks at 7.3%, suggesting that we haven’t reached the peak yet. To contain inflation, a Taylor Rule would have our OCR at 7.4% but it currently sits at less than half this value.
Our current quarterly GDP growth is lower than expected, but the rise of inflation is slowing down. However, my biggest concern is the record-high gap between our current OCR and where it should be to get a grip on inflation. If you don’t believe me, see for yourself (Gap to optimal OCR tracker on gdplive.net). It puts the reappointment of our Reserve Bank Governor in a different light.
Christoph is a Professor of Innovation and Economics at Massey University, the Director of the Knowledge Exchange Hub (Massey University's big data-driven research centre) and the ambassador for Australia and New Zealand of the Kronberg Academy (Germany). This article was first published HERE
5 comments:
Great use of AI and technology, a reserve bank economist might be as useful as a parking attendant
I wonder how the Prof handles used house prices. Normally ignored as regarded as capital, like svings in the bank. So the huge rises of recent years had little effect and the current fall would disguise inflation if included.
Well done! The sort of innovation I think everyone likes to see from our universities.
But I should have said, many mortgage holders will be extremely worried.
Wonderful tool! You've done the country a service.
Let's hope it doesn't get used selectively.
Post a Comment
Thanks for engaging in the debate!
Because this is a public forum, we will only publish comments that are respectful and do NOT contain links to other sites. We appreciate your cooperation.