Researchers use natural language processing to estimate inflation

Bank-of-Canada-HQ
The Bank of Canada
Bank of Canada/Flickr

Researchers from the Bank of Canada say they have created new indicators of inflation and supply and demand using analysis based on natural language processing.

The researchers use this technique to examine earnings calls – teleconferences where publicly quoted companies discuss the results of their latest reporting period.

“Text-based indicators are highly correlated with official inflation data and estimates of the output gap, and improve the accuracy of inflation forecasts,” write Marc

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