How do machine learning models handle economic downturns? Turns out, not so well! In this episode, we dive into fascinating research that reveals how financial AI models struggle during recessions—and how a clever "decoder" method could help detect economic downturns before they happen.

We discuss why traditional models fail, how financial data shifts during recessions, and how researchers are using machine learning’s own weaknesses to create an early warning system for market crashes. Can AI really predict a recession before it happens? Tune in to find out!

Find the full research paper here: https://community.quantopian.com/c/community-forums/quantpedia-impact-of-business-cycles-on-machine-learning-predictions

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Quant Radio is an AI-generated podcast, intended to help people develop their knowledge and skills in Quant finance. This podcast is not intended to provide investment advice.