Large language models can forecast inflation more accurately than the Survey of Professional Forecasters (SPF), new research finds.

Economists with the Federal Reserve Bank of St Louis argue Google’s Pathways Language Model (Palm) is both inexpensive and effective at predicting price changes.

AI language models “may provide an inexpensive and accurate alternative approach to generating forecasts of inflation”, researchers Miguel Faria-e-Castro and Fernando Leibovici say. They note other