Identify macroeconomic causal factors

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Reference no: EM133770351 , Length: word count:1000

Programming AI for Business Analytics

Assessment - AI Causal Models and Large Language Model Forecasting Project

Assessment - Project

Your Task

You are required to:
Create a "bi-annual report" for the Australian "Directorate for Geopolitical and Economic Analytics".
Showcases your creative, analytical, and technical strengths in the application of AI-causal models with Large Language Models for forecasting.

Background
Australia has established the "Directorate for Geopolitical and Economics Analytics" (DGEA) and you have been appointed as the Director for Business Analytics.
Your core responsibilities are:
To apply AI Causal and Large Language Models for the analysis of macroeconomic data.
To create the bi-annual "Geopolitical and Economics Outcomes" report for the Directorate that details the causal factors responsible for the shifts in Australian macroeconomic indicators such as inflation rate, interest rates, and overall economic growth.
To provide short-term, 3-6 months forecasts, using the latest advancements in AI, specifically, that of NeuralProphet and LLMs.
To identify macroeconomic causal factors that have an impact on the Australian inflation rate and overall economic growth.
To make strategic recommendations on the Monetary and Economic Policy to the Australian Government.

The DGEA Global Macroeconomics Dataset

The Directorate for Geopolitical and Economics Analytics harvests and analyses a large macroeconomic dataset that includes data for the following economies:
Australia, US, EU, and BRICS

And includes the following set of economic indicators:
GNI - Gross National Income
Core and Headline Inflation rates
Interest rate
GDP (Power Purchasing Parity)
Currency exchange rates
Broad Money Supply
The central bank cash rate
Unemployment Rates
Debt-to-GDP Ratio
The dataset and notebook examples will be provided in Week 10.

Assessment Instructions
Section #1: Descriptive Analytics section (5 marks)

Visualise the data
Comment characteristics, trends, and key features
Comment on the descriptive statistics
Incorporate the above in compelling storytelling

Section #2: Forecast the Inflation Rate and Economic Growth without Causal Factors (3 marks)
For 3 - 6 months period into the future, forecast the following using NeuralProphet:
Australia's inflation rate
Section #3: Correlation and Identification of Causal Factors (5 marks)

Use LightGBM with SHAP to determine the correlation of predictors with the CPI or Inflation Rate as the outcome.
Use EconML to identify which of the correlation factors are causal.
Generate a table of p-values.
Visualise the corresponding ATE Chart.

Section #4: Forecasting with Causal Factors and creating heterogeneous causal trees (7 marks)
For 3 - 6 months period into the future, forecast the Australian Inflation Rate (CPI) using the causal factors as external regressors:
Forecast the Australian CPI using TemporalFusion.
Create the causal tree diagram

Section #5: Additional features (8 marks)

Introduce additional data features to the base DGEA dataset
Apply generative GANs/VAEs to augment the dataset
Describe how this affects inflation and report on your findings

Section #6: Discuss the results and propose recommendations (7 marks)

Results Section that covers your analysis and results
An Insights and Recommendations Section (3 marks) (300 words)
Identified each insight and provided recommendations based on these insights.
Comment on challenges in the 3 - 6 months into the future
Reflect on the strategic positioning of Australia within the economies of BRICS, US, and the EU.

Section #7: Create a Bi-annual Directorate Report (5 marks)
Create the Directorate Bi-Annual Report using the insights from the above Sections. Your report must contain the following:

An artistic Cover Page
You may use Canva to generate the Cover Page.
You may also use LLMs to generate the artwork.

A Contents Page
An Executive Summary (200 words)
An Introduction to the geopolitical economics of Australia, EU, US, and BRICS
Use visuals for storytelling (300 words)
Remember to visualise the Directorate's Global Macroeconomic Dataset
A Methodology Section
Describe and reference LLMs and Causal AI

Results Section (200 words)
Describe the causal factors.
Visualise and describe the forecasts.

Insights and Recommendations Section (300 words)
Identify each insight and write recommendations based on these insights.
During the 3 - 6 months into the future, what will be the challenges faced by Australia?
Your recommendation should include how Australia could strategically position itself within the economies of BRICS, US, and EU.

Reference no: EM133770351

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