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RBI economists suggest new machine learning methods for inflation forecasting

Economists at the Reserve Bank of India (RBI) argue that traditional models like the Phillips Curve, used for inflation prediction, may not effectively capture the inflation-cause relationship. In their paper, Inflation Forecasting in India: Are ML techniques useful, they advocate for advanced machine learning (ML) methods, stating that ML outperformed traditional models in both pre-pandemic and post-pandemic periods, particularly in handling inflation volatility during the pandemic. ....

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