Harnessing Generative AI for Economic Insights

Abstract

We use generative AI to extract managerial expectations about their economic outlook from over 120,000 corporate conference call transcripts. The overall measure, AI Economy Score, robustly predicts future economic indicators such as GDP growth, production, and employment, both in the short term and to 10 quarters. This predictive power is incremental to that of existing measures, including survey forecasts. Moreover, industry and firm-level measures provide valuable information about sector-specific and individual firm activities. Our findings suggest that managerial expectations carry unique insights about economic activities, with implications for both macroeconomic and microeconomic decision-making.

Keywords: ChatGPT, Generative AI, Large Language Model, Macroeconomic Forecast, Managerial Expectations, Textual analysis, Artificial Intelligence

JEL Classification: C81, D2, E2, E3, E44