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Research on Forecasting of China's Monetary Policy Based on Random Forest Algorithm
  • chuanxin qiu
chuanxin qiu
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Abstract

This paper uses the random forest algorithm model to quantify and predict the monetary policy of the People’s Bank of China under the input of 16 indicators macroeconomic indicators. It is compared with three other machine learning algorithms (CART decision tree, support vector machine and neural network algorithm), discrete selection model and combined prediction model. The results show that the random forest algorithm shows better prediction accuracy in predicting the direction of the central bank’s monetary policy.