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On the Aggregation of Probability Assessments: Regularized Mixtures of Predictive Densities for Eurozone Inflation and Real Interest Rates

Francis X. Diebold, Minchul Shin, Boyuan Zhang

arXiv 21 Dec 2020 · Econometrics · publishedJournal of Econometrics (2022) · 13 citations (OpenAlex)

arXiv:2012.11649 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose methods for constructing regularized mixtures of density forecasts. We explore a variety of objectives and regularization penalties, and we use them in a substantive exploration of Eurozone inflation and real interest rate density forecasts. All individual inflation forecasters (even the ex post best forecaster) are outperformed by our regularized mixtures. From the Great Recession onward, the optimal regularization tends to move density forecasts' probability mass from the centers to the tails, correcting for overconfidence.

Citation extraction

37
references
53
in-text mentions
37
distinct cited
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9,032
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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
1Diebold and Shin (2019) Machine Learning for Regularized Survey Forecast Combination: Partially-Egalitarian Lasso and its Derivatives, International Jou…0.87452100%
2Granger and Ramanathan (1984) Improved Methods of Combining Forecasts, Journal of Forecasting\/, 3, 197–2040.84333100%
3Geweke and Amisano (2011) Optimal Prediction Pools, Journal of Econometrics\/, 164, 130–1410.73732100%
4Amisano and Geweke (2017) Prediction Using Several Macroeconomic Models, Review of Economics and Statistics\/, 99, 912–9250.73732100%
5Czado, Gneiting, and Held (2009) Predictive Model Assessment for Count Data, Biometrics\/, 65, 1254–12610.73732100%
6Brodie, Daubechies, De Mol, Giannone, and Loris (2009) Sparse and Stable Markowitz Portfolios, Proceedings of the National Academy of Sciences\/, 106, 12267–122720.64422100%
7Yao, Vehtari, Simpson, and Gelman (2018) Using Stacking to Average Bayesian Predictive Distributions, Bayesian Analysis\/, 13, 917–10030.64422100%
8Hall and Mitchel (2007) Combining Density Forecasts, International Journal of Forecasting\/, 23, 1–130.51121100%
9Gneiting and Raftery (2007) Strictly Proper Scoring Rules, Prediction, and Estimation, Journal of the American Statistical Association\/, 102, 359–3780.51121100%
10Bates and Granger (1969) The Combination of Forecasts, Operations Research Quarterly\/, 20, 451–4680.40511100%

Showing the top 10 of 37 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Predictive Density Combination Using a Tree-Based Synthesis Function1.00063
2$_2$-Relaxation: With Applications to Forecast Combination and Portfolio Analysis0.64422
3Machine Learning Advances for Time Series Forecasting0.40511
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