Two Massey University academics have launched their very own technological tool able to track and measure the nation’s inflation levels.
The Inflation Tracker was created by Professor Christoph Schumacher from the School of Economics and Finance, and Senior Lecturer Dr Teo Susnjak from the School of Mathematical and Computational Sciences at Massey University. It was also developed with the help of student, Peter Hwang.
Professor Schumacher and Dr Susnjak use an add-on artificial intelligence (AI) powered tool, GDPLive, a tool they have previously created to help Inflation Tracker function.
The tool will be the first AI-powered tool in the world to track inflation in real time.
“Knowing which way inflation is heading and what the OCR should be will allow users to anticipate interest rate changes which are also closely linked to the strength of our dollar. Together with GDP values, this provides a good snapshot of the health of our economy,” says Professor Schumacher.
Through the Inflation Tracker, people can track live inflation levels across the country and showing a Taylor-Rule-based optimal Official Cash Rate (OCR) value for New Zealand and tracks the gap between the current OCR and optimal OCR.
Professor Schumacher says the inflation tracker technology is of real interest as people measure how the economy is performing.
Inflation data is often never current or up-to-date as the government releases the data on a three-month or six-month basis.
“Our aims are to embrace the seismic shifts our societies are undergoing in respect to the availability of new and rich data sources that can be mined and converted into valuable insights,” says Schumacher.
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They say the tool still has room to improve as it receives more data and improved prediction accuracies.
Once matured, Professor Schumacher and Dr Susnjak see the tool as “indispensable” for the government and the industry.
For Independent Adviser Stuart Henderson, who has spent 30 years advising the government and corporate entities on treasury risk management, says the tool will help him get a feel for the current “real time mood of New Zealand economic activity nationally, regionally and by sector.
This will help make a difference to monetary policy decision making, he says.
“It means that planning conversations can be in the present and not constantly based off lagged historical data,” says Henderson.
Executive Director of the New Zealand Initiative, Dr Oliver Hartwich says that the tool through GDPLive will help with the economy as the space needs data to know where to stand for future actions.
“This is what makes GDPLive such a valuable tool. Instead of waiting for months to find out what happened in the past, GDPLive tells us what is happening right now. Everyone working in economic policy should use GDPLive.”
The Inflation Tracker is now publicly available on http://gdplive.net.
