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Factor-augmented tree ensembles

Filippo Pellegrino

arXiv 27 Nov 2021 · Statistics — Machine Learning

arXiv:2111.14000 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This manuscript proposes to extend the information set of time-series regression trees with latent stationary factors extracted via state-space methods. In doing so, this approach generalises time-series regression trees on two dimensions. First, it allows to handle predictors that exhibit measurement error, non-stationary trends, seasonality and/or irregularities such as missing observations. Second, it gives a transparent way for using domain-specific theory to inform time-series regression trees. Empirically, ensembles of these factor-augmented trees provide a reliable approach for macro-finance problems. This article highlights it focussing on the lead-lag effect between equity volatility and the business cycle in the United States.

Citation extraction

69
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109
in-text mentions
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distinct cited
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self-citations
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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
1M. Barigozzi and M. Luciani (2020) Quasi maximum likelihood estimation and inference of large approximate dynamic factor models via the em algorithm0.92843100%
2F. Pellegrino (2023) Selecting time-series hyperparameters with the artificial jackknife0.87492100%
3M. Bańbura and M. Modugno (2014) Maximum likelihood estimation of factor models on datasets with arbitrary pattern of missing data0.84333100%
4B. Bernanke, M. Gertler, and S. Gilchrist (1996) The financial accelerator and the flight to quality0.84333100%
5L. Breiman (1996) Bagging predictors0.84333100%
6M. Gertler and S. Gilchrist (1994) Monetary policy, business cycles, and the behavior of small manufacturing firms0.84333100%
7S. A. Sharpe (1994) Financial market imperfections, firm leverage, and the cyclicality of employment0.84333100%
8T. Hasenzagl, F. Pellegrino, L. Reichlin, and G. Ricco (2022) A model of the fed's view on inflation0.81142100%
9T. Hasenzagl, F. Pellegrino, L. Reichlin, and G. Ricco (2022) Monitoring the economy in real time: Trends and gaps in real activity and prices0.81142100%
10L. Breiman, J. Friedman, C. J. Stone, and R. A. Olshen (1984) Classification and regression trees0.73732100%

Showing the top 10 of 69 scored citations.