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Implicit Copulas: An Overview

Michael Stanley Smith

arXiv 10 Sep 2021 · Statistics — Methodology

arXiv:2109.04718 · PDF · Extracted main text

Abstract

Implicit copulas are the most common copula choice for modeling dependence in high dimensions. This broad class of copulas is introduced and surveyed, including elliptical copulas, skew $t$ copulas, factor copulas, time series copulas and regression copulas. The common auxiliary representation of implicit copulas is outlined, and how this makes them both scalable and tractable for statistical modeling. Issues such as parameter identification, extended likelihoods for discrete or mixed data, parsimony in high dimensions, and simulation from the copula model are considered. Bayesian approaches to estimate the copula parameters, and predict from an implicit copula model, are outlined. Particular attention is given to implicit copula processes constructed from time series and regression models, which is at the forefront of current research. Two econometric applications -- one from macroeconomic time series and the other from financial asset pricing -- illustrate the advantages of implicit copula models.

Citation extraction

134
references
243
in-text mentions
134
distinct cited
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self-citations
16,392
main-text words

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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
1Smith, M.S (2015) Copula modelling of dependence in multivariate time series self1.00063100%
2Loaiza-Maya, R., Smith, M.S (2019) Variational Bayes estimation of discrete-margined copula models with application to time series self1.00054100%
3Loaiza-Maya, R., Smith, M.S., Maneesoonthorn, W (2018) Time series copulas for heteroskedastic data self1.00053100%
4Smith, M.S., Gan, Q., Kohn, R.J (2012) Modelling dependence using skew t copulas: Bayesian inference and applications self1.00053100%
5Smith, M.S., Maneesoonthorn, W (2018) Inversion copulas from nonlinear state space models with an application to inflation forecasting self0.9416583%
6McNeil, A.J., Frey, R., Embrechts, R (2005) Quantitative Risk Management: Concepts, Techniques and Tools0.92843100%
7Danaher, P.J., Smith, M.S (2011) Modeling multivariate distributions using copulas: Applications in marketing self0.92843100%
8Nelsen, R.B (2006) An Introduction to Copulas0.92843100%
9Pitt, M., Chan, D., Kohn, R (2006) Efficient Bayesian inference for Gaussian copula regression models0.92843100%
10Klein, N., Smith, M.S (2019) Implicit copulas from Bayesian regularized regression smoothers self0.87472100%

Showing the top 10 of 134 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
1myblue Tractable Unified Skew-t Distribution and Copula for Heterogeneous Asymmetries0.64422
2myblue Large Skew-t Copula Models and Asymmetric Dependence in Intraday Equity Returns0.40511
3Principal Component Copulas for Capital Modeling and Systemic Risk0.40511
4Bayesian Modular Inference for Copula Models with Potentially Misspecified Marginals0.40511