Inflation tracker launched

A state-of-the-art tool to measure national inflation levels has been launched by two Massey academics.

The Inflation Tracker is the brainchild of Professor Christoph Schumacher from the School of Economics and Finance, and Senior Lecturer Dr Teo Susnjak from the School of Mathematical and Computational Sciences. It was developed at Massey’s Knowledge Exchange Hub with the assistance of master’s student Peter Hwang.

A statement from the university says it provides accurate, live data that shows inflation levels around New Zealand, and how these levels are tracking. The tracker also shows a Taylor-Rule-based optimal Official Cash Rate (OCR) value for New Zealand, and tracks the gap between the current OCR and optimal OCR.

The new tracker is an add-on to the artificial intelligence (AI)-powered Gross Domestic Product (GDP) tracker GDPLive, which was launched by Schumacher and Susnjak in 2018. Since its launch in December 2018, GDPLive has had 5,375,148 page views.

Schumacher says there is a real interest and need to estimate how the economy is performing right now.

 “What we know about national GDP and inflation levels are never current or up-to-date, because the Government releases their data with a three to six month delay. 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.”

He says that as the project matures with more data and improved prediction accuracies, it has the potential to be an indispensable tool for government and industry.

 “We believe that this project can serve government, businesses, media, and other institutions in providing a useful estimate of inflation and economic activity that can complement and augment currently used data.”

Schumacher says GDPLive is the only AI-powered GDP tracker in the world, and adding a live inflation and optimal OCR tracker for New Zealand makes the tool even more powerful.

“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.”

 The Inflation Tracker was launched in Auckland at an event hosted by the Bank of New Zealand and is now publicly available on http://gdplive.net.

 Massey University says it provided funding for GDPLive, and a number of New Zealand organisations from a variety of industry sectors have partnered with the project to make the trackers possible. A list of partners and data sources can be found here.

IMAGE: From left: Peter Hwang, Professor Christoph Schumacher and Dr Teo Susnjak at the inflation tracker launch event.

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