The health, economic and social crisis caused by the COVID-19 pandemic has highlighted the need for continuous economic activity monitoring and nowcasting. However, most traditional econometric models rely on historical macroeconomic indicators with relatively significant lags, which diminishes the accuracy of economic forecasts as well as the relevance of the measures targeted at regulation of the economy. Therefore, within the framework of this project, an interactive tool for nowcasting economic activity in real-time using big data will be developed.
The capability of tracking economic processes in the country and monitoring their changes in real-time (or with a minimum lag) will allow this tool to be entitled as an early risk warning system, with a research-based and locally aggregated big data database as well as appropriately selected and adapted artificial intelligence models. The product will be useful to various economic entities, i.e. public and private sector institutions, national governmental institutions. It will allow to nowcast the potential changes in operating conditions and make reasoned and timely decisions related to economic activity in real-time. The results of this research would create innovative access to nowcasting economic activity and contribute to the development of interdisciplinarity in terms of the integration of economics, big data and artificial intelligence. This research would allow to implement the theme “Artificial Intelligence, Big Data and Distributed Data” of the Smart Specialization Priority “Information and Communication Technologies” and contribute to economic research progress through the application of artificial intelligence methods and the targeted use of big data.
This research project is funded by the European Regional Development Fund according to the 2014–2020 Operational Programme for the European Union Funds’ Investments, under measure’s No. 13.1.1-LMT-K-718 activity “Research Projects Implemented by World-class Researcher Groups to develop R&D activities relevant to economic sectors, which could later be commercialized”. Funded as part of the European Union’s response to the COVID-19 pandemic
An interactive tool for nowcasting economic activity in real-time, using big data and artificial intelligence methods will be developed. The results of project research would create innovative access to nowcasting economic activity for economic entities and would contribute to the development of interdisciplinarity in terms of the integration of economics, big data and artificial intelligence. This would promote a new approach to nowcasting economic research both in Lithuania and internationally. In addition, the created big data database (including alternative big data), intended for research and education, will be for the first time compiled in Lithuania and constantly updated. The structure of the big data database would allow not only to nowcast national economic activity, but also to develop particular sectoral models and their economic insights. Depending on the nature and availability of the big data, the interactive tool would be structured into the following modules: the general module of economic activity; the business cycle module; the labor market module; the commodity price module; the pollution module; the traffic module; the consumer sentiment/expectations module; the service/industry sector modules. This justifies the uniqueness and innovativeness of the tool compared to similar research or products used in the market. This interactive tool could be useful to public and business sector institutions, financial service companies, etc. Taking advantage of the clear graphical visualization and user-friendly environment, users of this tool could easily track national economic activity in real-time or with a minimum lag. At the end of the project, the product will be ready for commercialization.
Period of project implementation: 2021-11-03 - 2023-08-31
Project coordinator: Kaunas University of Technology