Machine-Learning Techniques in Economics : New Tools for Predicting Economic Growth

This book develops a machine-learning framework for predicting economic growth. It can also be considered as a primer for using machine learning (also known as data mining or data analytics) to answer economic questions. While machine learning itself is not a new idea, advances in computing technology combined with a dawning realization of its applicability to economic questions makes it a new tool for economists. We use these tools to (a) predict economic growth and recessions; (b) Use a variable's importance for reducing prediction errors to rank variables; (c) Use variable rankings to choose between competing theoretical growth models; and (d) show how variables affect growth non linearly -- thus highlighting country specific pathways to growth