This project studies international uncertainty links between Australia and other countries using a Bayesian Additive Regression Trees (BART) algorithm and was undertaken while doing my Master of Science in Economics at the University of Edinburgh.
- The final report can be downloaded here
- The R code to replicate the research can be found here
Abstract
This project studies international uncertainty links between Australia and other countries using a Bayesian Additive Regression Trees (BART) algorithm. I use indexes of economic policy uncertainty (EPU) first developed by Baker, Bloom, and Davis (2015) to examine how EPU in Australia is linked to EPU in other countries. This project replicates research by Gupta, Pierdzioch, and Risse (2016), who studied how EPU in Canada is linked to EPU in seven other countries using a BART algorithm. Like Gupta, Pierdzioch, and Risse (2016), I utilise partial-dependence plots, relative importance measures, and permutation tests from the `bartMachine’ package in the R programming environment. I find Australian EPU is more strongly linked to the Indo-Pacific region than Anglosphere countries.