Economic Forecasting with Large Language Models: From Stock Pricing to GDP Growth
Two experiments on what LLMs can and cannot do with numbers. First, an LLM is placed inside a demand-based asset-pricing framework: it predicts institutional investor demand from stock characteristics, and prices follow. Fine-tuning with GRPO clearly improved the demand forecasts, but not enough to beat a simple price benchmark consistently. Second, a reasoning model reads a stream of real-time news and forecasts annual GDP growth. Benchmarked against the IMF, its forecasts were competitive and often more accurate for major economies such as the United States, China and Germany.


