Deep learning for economic transformation: a parametric review

Abstract

Deep learning (DL) is increasingly recognized for its effectiveness in analyzing and forecasting complex economic systems, particularly in the context of Pakistan's evolving economy. This paper investigates DL's transformative role in managing and interpreting increasing volumes of intricate economic data, leading to more nuanced insights. DL models show a marked improvement in predictive accuracy and depth over traditional methods across various economic domains and policymaking scenarios. Applications include demand forecasting, risk evaluation, market trend analysis, and resource allocation optimization. These processes utilize extensive datasets and advanced algorithms to identify patterns that traditional methods cannot detect. Nonetheless, DL's broader application in economic research faces challenges like limited data availability, complexity of economic interactions, interpretability of model outputs, and significant computational power requirements. The paper outlines strategies to overcome these barriers, such as enhancing model interpretability, employing federated learning for better data privacy, and integrating behavioral and social economic theories. It concludes by stressing the importance of targeted research and ethical considerations in maximizing DL's impact on economic insights and innovation, particularly in Pakistan and globally.