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A Scalable Inference Method For Large Dynamic Economic Systems

Pratha Khandelwal, Philip Nadler, Rossella Arcucci, William Knottenbelt, Yi-Ke Guo

arXiv 27 Oct 2021 · Econometrics

arXiv:2110.14346 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The nature of available economic data has changed fundamentally in the last decade due to the economy's digitisation. With the prevalence of often black box data-driven machine learning methods, there is a necessity to develop interpretable machine learning methods that can conduct econometric inference, helping policymakers leverage the new nature of economic data. We therefore present a novel Variational Bayesian Inference approach to incorporate a time-varying parameter auto-regressive model which is scalable for big data. Our model is applied to a large blockchain dataset containing prices, transactions of individual actors, analyzing transactional flows and price movements on a very granular level. The model is extendable to any dataset which can be modelled as a dynamical system. We further improve the simple state-space modelling by introducing non-linearities in the forward model with the help of machine learning architectures.

Citation extraction

18
references
23
in-text mentions
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distinct cited
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self-citations
4,889
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
1Philip Nadler, Rossella Arcucci, and Yi-Ke Guo (2019) Data assimilation for parameter estimation in economic modelling self0.73732100%
2Philip Nadler, Rossella Arcucci, and Yi-Ke Guo A Scalable Approach to Econometric Inference self0.64422100%
3Guokun Lai, Wei-Cheng Chang, Yiming Yang, and Hanxiao Liu (2018) Modeling long-and short-term temporal patterns with deep neural networks0.58531100%
4Rainer Bohme, Nicolas Christin, Benjamin Edelman, and Tyler Moore (2015) Bitcoin: Economics, technology, and governance0.40511100%
5Mark Asch, Marc Bocquet, and Maëlle Nodet Data Assimilation: Methods, Algorithms, and Applications0.40511100%
6Ross Bannister Variational data assimilation background and methods0.40511100%
7Christian Hotz-Behofsits, Florian Huber, and Thomas Otto Zörner (2018) Predicting crypto-currencies using sparse non-gaussian state space models0.40511100%
8Author Blockgeeks and Blockgeeks (2020) What is the 0x project? the most comprehensive guide ever written, Apr 20200.40511100%
9Jake Frankenfield (2020) Bitcoin exchange definition, Aug 20200.40511100%
10Andrew G Haldane (2018) Will big data keep its promise0.40511100%

Showing the top 10 of 18 scored citations.