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Robust Forecasting

Timothy Christensen, Hyungsik Roger Moon, Frank Schorfheide

arXiv 6 Nov 2020 · Econometrics · 3 citations (OpenAlex)

arXiv:2011.03153 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We use a decision-theoretic framework to study the problem of forecasting discrete outcomes when the forecaster is unable to discriminate among a set of plausible forecast distributions because of partial identification or concerns about model misspecification or structural breaks. We derive "robust" forecasts which minimize maximum risk or regret over the set of forecast distributions. We show that for a large class of models including semiparametric panel data models for dynamic discrete choice, the robust forecasts depend in a natural way on a small number of convex optimization problems which can be simplified using duality methods. Finally, we derive "efficient robust" forecasts to deal with the problem of first having to estimate the set of forecast distributions and develop a suitable asymptotic efficiency theory. Forecasts obtained by replacing nuisance parameters that characterize the set of forecast distributions with efficient first-stage estimators can be strictly dominated by our efficient robust forecasts.

Citation extraction

55
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83
in-text mentions
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distinct cited
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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Hirano, K. and J. R. Porter (2009) Asymptotics for statistical treatment rules1.00074100%
2Honoré, B. E. and E. Tamer (2006) Bounds on parameters in panel dynamic discrete choice models1.00063100%
3van der Vaart, A (2000) Asymptotic Statistics0.81142100%
4Chernozhukov, V., I. Fernández-Val, J. Hahn, and W. Newey (2013) Average and quantile effects in nonseparable panel models0.73732100%
5Christensen, T. and B. Connault (2019) Counterfactual sensitivity and robustness self0.73732100%
6Csiszár, I. and F. Matús (2012) Generalized minimizers of convex integral functionals, Bregman distance, Pythagorean identities0.64422100%
7Giacomini, R. and T. Kitagawa (2018) Robust bayesian inference for set-identified models0.64422100%
8Kitagawa, T (2012) Estimation and inference for set-identified parameters using posterior lower probabilities0.64422100%
9Moon, H. R. and F. Schorfheide (2012) Bayesian and frequentist inference in partially identified models self0.64422100%
10Bonhomme, S. and M. Weidner (2019) Minimizing sensitivity to model misspecification0.51121100%

Showing the top 10 of 55 scored citations.