Bank Run, Interrupted: Modeling Deposit Withdrawals with Generative AI


Sophia Kazinnik

May 15, 2024

Federal Reserve Research: richmond

I use a large language model to generate synthetic survey responses to different bank run scenarios. By assigning the model with specific demographic characteristics, I simulate diverse populations of agents, and assess their responses to varied conditions and communication-based interventions related to a bank run. The simulated responses, reflecting trends in bank deposit withdrawals across demographic categories, align with existing empirical studies. This novel application offers a cost-effective method to analyze hypothetical scenarios using simulated data, and highlights the potential of language models in providing insights into human behavior in economic context.

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