Equities
February 7, 2023
Using a cutting-edge approach that incorporates at a large scale low-frequency macro-economic variables with high-frequency sentiment indicators, RavenPack is able to nowcast China's macroeconomic indicators with enhanced accuracy and timeliness.
Nowcasting models are an invaluable tool for policymakers and financial professionals, providing timely updates on key economic indicators like gross domestic product (GDP), inflation, employment, and industrial production.
Leveraging RavenPack EDGE Analytics, a state-of-the-art nowcasting model is applied to predict Chinese macroeconomic activity in real time, demonstrating its potential as a powerful forecasting tool.
Observations reveal:
The addition of RavenPack Analytics to the model improves performance in terms of the out-of-sample forecasting error by up to 7%, depending on the prediction period.
RavenPack Analytics is valuable in terms of timeliness and accuracy, particularly when there is a lack of macroeconomic data.
RavenPack Analytics aggregated with a decaying factor over a short horizon (30 days) provides the best contribution as recent events are emphasized.
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In this presentation, Paolo Andreini, Senior Data Scientist at RavenPack, introduced a macroeconomic nowcasting model,based on RavenPack EDGE, that can help predict real-time economic activity.
RavenPack presents a macroeconomic nowcasting model that leverages its EDGE data platform to predict real-time economic activity of four important emerging market economies: Brazil, Russia, India and South Africa.