aau/MüllerWhen will inflation fall and when will economic growth accelerate? Luis Gruber, an early career researcher in Gregor Kastner’s research team at the Department of Statistics, is developing new statistical methods to help predict socially relevant topics such as economic development. It is important to note that statistics are not a crystal ball. We will not be able to predict the future with complete accuracy, which makes it all the more important to use new methods in order to demonstrate the degree of uncertainty associated with predictions.
“It’s not just political actors and central banks who want to know: What will happen to the economy? What impact do various levers, such as interest rates or government investment, have on gross domestic product, for example? There are time series for these indicators – i.e. data from the past spanning a lengthy period. We now want to develop new methods to generate better predictions for the future from this data,” explains Luis Gruber, who is working on his doctoral thesis as part of the project ‘Structured Bayesian Dynamic Covariance Modelling for Financial and Macroeconomic Forecasting’, funded by the Austrian National Bank (OeNB).
Luis Gruber looks for patterns in time series that have triggered similar movements in data, i.e. correlations between time series. When asked what challenges he encounters in this work, he explains: “Today, we have access to far greater volumes of data than was previously the case. So we also need more robust methods than before that can handle these volumes.” On the one hand, the high volume of data is an advantage for statistics because more information can be obtained from more data. At the same time, however, it is becoming more difficult to filter out important information: “Just because we have more data does not necessarily mean that every additional piece of information is helpful.”
It was not a foregone conclusion that Luis Gruber would end up pursuing research in this field. When he was at school in Bavaria, he had two passions: music and mathematics. He first came to Vienna in 2012 to study the clarinet. During his studies, Luis Gruber was under contract as a clarinettist with the Nuremberg Symphony Orchestra and was also a substitute member of the Vienna Symphony Orchestra. After graduating, Luis Gruber realised that he needed an alternative to music: “Music was my whole passion. I saw that it would be challenging to turn it into a career. And I realised that if you focus too much on one thing, there is a risk of losing the joy of it.” Luis Gruber therefore decided to branch out into a second field and studied economics and social sciences at the Vienna University of Economics and Business. There he met Gregor Kastner, who was on the lookout for young talent. This was followed by a Master’s degree in Mathematics at the University of Klagenfurt and then a position as an Early Career Researcher focusing on Bayesian Statistics and Econometrics. Luis Gruber is delighted with his progress: “We are making good progress with the project. On the one hand, this naturally involves a lot of thinking with pen and paper, but I also regularly program software to implement and test the methodology and ultimately make it freely accessible. The implementation is a big learning process because we then see that things behave differently than we originally expected. This work is very exciting.”
So, once his project is complete, will we know when inflation will fall and the economy will rebound in this country? We are told that it is not that simple, because: “Predictions based on statistical methods and procedures are subject to uncertainty. The public is often presented with a black-and-white picture, but in reality we are dealing with many shades of grey. One of our approaches is therefore to provide a methodology that shows the user how uncertain the predictions are.”
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A few words with … Luis Gruber
When was the last time you discussed your research with someone outside the scientific community?
People often ask me about my research at family gatherings/celebrations and when I meet up with friends.
What is the first thing you do in the office each morning?
I usually start the day at the office with a cup of coffee.
Who do you regard as the greatest scientist in history, and why?
Science as a whole is very diverse. It’s difficult for me to reduce it to one person.
What makes you furious?
Intolerance
And what calms you down?
Sport, music and family
Do you take proper holidays? Without thinking about your work?
Absolutely, but it may take a few days to clear my head completely.
Der Beitrag Using new methods to predict economic development erschien zuerst auf University of Klagenfurt.