The Deutsche Bundesbank has created MILA, or Monetary-Intelligent Language Agent, an innovative model that uses AI to analyse central bank communication. MILA uses state-of-the-art language models to assess monetary policy statements in a transparent, granular and consistent manner. The model analyses sentences individually, takes into account the economic context and provides a comprehensible justification for each classification.
The sentence-by-sentence approach to analysis makes sure that the assessment AI reaches remains understandable for human users, allowing the Bundesbank’s experts to review and query the results directly.
The first step will be to derive the inflation context, which will serve as background information for the actual classification.
