Liam Dann: Can artificial intelligence tell us if inflation has peaked?

OPINION:

After all the inflation debate in the past week, the prospect of writing another column about it seemed pretty daunting.

So I thought I’d get the new artificially intelligent ChatGPT app to do it
for me.

The powerful new writing tool is already worrying teachers because it allows students to generate high-quality essays in seconds.

You just type in the question and it pulls content from all over the internet into a well-written, grammatically accurate piece of work.

Apparently, it will soon be able to do my job. Great, I thought, let’s see what it can do.

I typically like to start my columns with something light, to draw people in before we get into the serious economic stuff.

Can you make a joke about the economic phenomenon of inflation? I asked.

“Sure! Here is a joke about inflation: Why did the economist cross the road? To get to the other side of the inflation rate!” ChatGPT replied.

“Please note that this is a simple joke and the subject of inflation and economy are important and should be treated with seriousness,” it added for good measure.

That’s a terrible joke, although for some reason I found the earnest disclaimer pretty funny.

Perhaps that’s part of ChatGPT’s comedy schtick, like Ricky Gervais doing his David Brent character.

Undeterred I tried again, opting for another one of my classically relatable business writing techniques – the sporting analogy.

Summarise New Zealand’s inflation problem using the Black Caps cricket team as a metaphor, I commanded.

“The Black Caps, like inflation, can be unpredictable and difficult to control,” ChatGPT wrote, doing well to capture the ongoing pain of Kiwi cricket fans.

“Just as a team’s performance may fluctuate due to a variety of factors, inflation can be affected by changes in the economy, government policies and external events. In the same way, a cricket coach must constantly make adjustments to improve the performance of their team, the Reserve Bank of New Zealand may need to adjust interest rates and other monetary policies to keep inflation within an acceptable range.”

Well, that’s all true, I guess. But it’s not eloquent and doesn’t tell us very much.

What we really want from a newspaper column is insight. What we want to know this week is: Has inflation in New Zealand peaked?

To the relief of journalists around the world, ChatGPT can’t yet pull together up-to-date data, so it can’t write news stories.

However, one suspects it’s just a matter of time until it can.

More promising for us human writers, ChatGPT also says it doesn’t have any actual opinions.

That seemed like good news for my career prospects. Although having declared it doesn’t have opinions, ChatGPT then offered this one:

“Whether or not inflation has peaked is uncertain and difficult to predict as it can be affected by various factors such as economic growth, global commodity prices and monetary policy.”

Unfortunately, that was my opinion too.

I mean who knows, right?

The inflation data on Tuesday was fairly inconclusive.

The topline figure was unchanged at an annual rate of 7.2 per cent. The tradable inflation rate (the international stuff) was muddied by an exceptionally large spike in airfares which wiped out the gains from lower petrol prices.

Domestic (non-tradable) inflation – stuff like food prices, construction and labour costs – was steady despite expectations that it would keep rising.

So that had some economists saying it’s peaked and adjusting their expectations for the next Reserve Bank interest rate call – from a 75 basis-point hike to a 50 basis-point hike.

I certainly hope it has peaked. That’s my preference.

Oddly though, given how hopeful I was that inflation would be transitory, I’m struggling to join the peak inflation party.

I think I just need to see it dead and buried. I don’t want any last-minute jump scares.

As horror movie fans know, it always pays to give that zombie one last whack.

Like the ASB economists, I’m still leaning towards the Reserve Bank doing just that, with a final 75 basis-point hike next month.

I’m conflicted of course, and have previously written about concerns that the Reserve Bank could overdo the hikes and damage the economy.

That highlights one area where we can be confident AI is a long way from mimicking real human thought – good old-fashioned emotional bias.

“As a language model, I don’t have the capability of having emotions such as hope,” ChatGPT confessed.

Well, there you go. Humans might not have much left to distinguish us from machines but we have hope – or, sometimes, a lack of hope.

I don’t want my mortgage payments to keep rising, or yours. I don’t want recession and rising unemployment. I don’t want rising rates to crash markets and further dampen my KiwiSaver returns.

But I also want prices to stop rising and would rather see the economy rebalanced sooner rather than later.

Humans huh? We’re a complex mess of contradictory ideas and feelings.

Columns like this one are about working through those thoughts in public, hopefully, in a way that helps you to frame your own thoughts, hone your views or change them.

And, ideally, with a joke or two along the way.