AI and Data Gaps: The Plot Thickens - The AI Journal

Four weeks ago, my last article for The AI Journal pointed out that the COVID-19 "creates data deficits … Relaxed or suspended regulatory reporting requirements deliver less data to governments for aggregation, which in turn delivers less complete data sets to markets." It did not take long before the official sector started pointing out crucial breaks in key data sets used for global macro and credit risk analysis. De Nederlandsche Bank (the Dutch central bank) recently released research showing that key inputs for HIPC inflation measures were not collected during March and April. Because the HIPC data is only updated annually, when central bankers sought to plug the gap in order to conduct monetary policy, they only alternative was to use same-month 2019 data as a proxy for 2020 prices in key sectors disrupted by the pandemic. While the data gap was resolved, actual price data diverged significantly from the estimated data.