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An essential element of the work of the Fund is to monitor and forecast international trade. This paper uses SWIFT messages on letters of credit, together with crude oil prices and new export orders of manufacturing Purchasing Managers’ Index (PMI), to improve the short-term forecast of international trade. A horse race between linear regressions and machine-learning algorithms for the world and 40 large economies shows that forecasts based on linear regressions often outperform those based on machine-learning algorithms, confirming the linear relationship between trade and its financing through letters of credit.

Business and Economics --- Exports and Imports --- Macroeconomics --- Trade: Forecasting and Simulation --- Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation --- Trade: General --- Energy: Demand and Supply --- Prices --- Macroeconomic Aspects of International Trade and Finance: General --- Empirical Studies of Trade --- International economics --- Oil prices --- Imports --- Exports --- Trade finance --- Trade balance --- International trade --- International finance --- Balance of trade --- Hong Kong Special Administrative Region, People's Republic of China

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Using the 2010, 2015, and 2020/2021 datasets of the IMF’s Central Bank Legislation Database (CBLD), we explore artificial intelligence (AI) and machine learning (ML) approaches to analyzing patterns in central bank legislation. Our findings highlight that: (i) a simple Naïve Bayes algorithm can link CBLD search categories with a significant and increasing level of accuracy to specific articles and phrases in articles in laws (i.e., predict search classification); (ii) specific patterns or themes emerge across central bank legislation (most notably, on central bank governance, central bank policy and operations, and central bank stakeholders and transparency); and (iii) other AI/ML approaches yield interesting results, meriting further research.

Artificial intelligence --- Banking --- Banks and Banking --- Central bank autonomy --- Central bank governance --- Central bank legislation --- Central bank transparency --- Central Banks and Their Policies --- Central banks --- Currency crises --- Diffusion Processes --- Economic & financial crises & disasters --- Economics of specific sectors --- Economics --- Economics: General --- Forecasting and Other Model Applications --- Informal sector --- Intelligence (AI) & Semantics --- Large Data Sets: Modeling and Analysis --- Macroeconomics --- Technological Change: Choices and Consequences --- Technology