AI can solve more complex economic models – BIS paper
Neural networks help economists solve and estimate non-linear heterogeneous agent models
Economists have developed an artificial intelligence-driven method of solving general equilibrium models, a breakthrough that could make it easier to use more complex models in policy-making.
For decades, economists have been building models featuring heterogeneous agents and non-linearities. However, central banks have rarely adopted these for policy purposes, partly because solving and estimating the models is computationally intensive. Central Banking’s benchmarking data shows only 12.5% of
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