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Investigating Growth at Risk Using a Multi-country Non-parametric Quantile Factor Model

Todd E. Clark, Florian Huber, Gary Koop, Massimiliano Marcellino, Michael Pfarrhofer

arXiv 7 Oct 2021 · Econometrics

arXiv:2110.03411 · PDF · Extracted main text

Abstract

We develop a Bayesian non-parametric quantile panel regression model. Within each quantile, the response function is a convex combination of a linear model and a non-linear function, which we approximate using Bayesian Additive Regression Trees (BART). Cross-sectional information at the pth quantile is captured through a conditionally heteroscedastic latent factor. The non-parametric feature of our model enhances flexibility, while the panel feature, by exploiting cross-country information, increases the number of observations in the tails. We develop Bayesian Markov chain Monte Carlo (MCMC) methods for estimation and forecasting with our quantile factor BART model (QF-BART), and apply them to study growth at risk dynamics in a panel of 11 advanced economies.

Citation extraction

39
references
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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
1Huber, Koop, Onorante, Pfarrhofer, and Schreiner (2020) Nowcasting in a pandemic using non-parametric mixed frequency VARs0.73732100%
2Chipman, George, and McCulloch (2010) BART: Bayesian additive regression trees0.69351100%
3Adrian, Boyarchenko, and Giannone (2019) Vulnerable growth0.64422100%
4Stock and Watson (2005) Understanding changes in international business cycle dynamics0.51121100%
5Adrian, Grinberg, Liang, and Malik (2018) The term structure of growth-at-risk0.51121100%
6Korobilis, Landau, Musso, and Phella (2021) The time-varying evolution of inflation risks0.51121100%
7Kozumi and Kobayashi (2011) Gibbs sampling methods for bayesian quantile regression0.51121100%
8Pfarrhofer (2021) Tail forecasts of inflation using time-varying parameter quantile regressions self0.51121100%
9Bai, Carriero, Clark, and Marcellino (2020) Macroeconomic forecasting in a multi-country context0.40511100%
10Ferrara, Mogliani, and Sahuc (2019) Real-time high frequency monitoring of growth-at-risk0.40511100%

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Cited by, within the corpus

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

Citing paperIntensityMentionsSections
1Probabilistic Quantile Factor Analysis\@thefnmark\@footnotetextThe authors gratefully acknowledge helpful comments from participants of the 2023 SNDE symposium and the IAAE 2023 in Oslo. This paper should not be reported as representing the views of Norges Bank. The views expressed are those of the authors and do not necessarily reflect those of Norges Bank. The authors report there are no competing interests to declare0.40511
2Monitoring multicountry macroeconomic risk\@thefnmark\@footnotetextWe would like to thank Raffaella Giacomini, Sylvia Kaufmann, Massimiliano Marcellino, Christian Matthes, Mirco Rubin, Neil Shephard, Leif Anders Thorsrud and participants at the following conferences, for useful discussions and comments: 12th European Seminar on Bayesian Econometrics in Salzburg; “Advances in alternative data and machine learning for macroeconomics and finance” in Paris; Barcelona Workshop on Financial Econometrics; 27th International Conference on Macroeconomic Analysis and International Finance in Rethymno; 2023 Finance and Business Analytics Conference in Lefkada; 10th IAAE Annual Conference in Oslo. We would also like to thank seminar participants at the following institutions: BI Norwegian Business School, European Central Bank, University of Lancaster. The views expressed are those of the authors and do not necessarily reflect those of Norges Bank or any of the affiliated institutions0.40511