Machine Learning for Economic Forecast Based on Past 30 Years and Covid-19 Pandemic Data

Abstract

Along the time, there are many forecasting techniques applied by researchers in various topics in Economics. Traditionally, some of the most popular time-series analysis model like Vector-autoregressive (VAR) are still widely applied in Economics forecasting topics since they can capture sufficient information for a dataset to predict. On the other hands, machining learning and deep-learning algorithm also shades a way for forecasting. In particular, algorithm like Gradient boosting, learning algorithm Long-short-term memory (LSTM) shows their tremendous accuracy when applying to Economic data. Covid-19 leads to one of the largest economic recessions in history in terms of intensity and time. In this article, some of the popular forecasting methods are applied to forecasting GDP data with the record from Covid-19. The empirical analysis is conducted for data in United states to compare the accuracy and divergency for various prediction algorithms. It turns out that machine learning algorithms are well performed in US cases where they generate relatively low forecasting error.