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Gaussian Process Vector Autoregressions and Macroeconomic Uncertainty

Niko Hauzenberger, Florian Huber, Massimiliano Marcellino, Nico Petz

arXiv 3 Dec 2021 · Econometrics · publishedJournal of Business and Economic Statistics (2024) · 16 citations (OpenAlex)

arXiv:2112.01995 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We develop a non-parametric multivariate time series model that remains agnostic on the precise relationship between a (possibly) large set of macroeconomic time series and their lagged values. The main building block of our model is a Gaussian process prior on the functional relationship that determines the conditional mean of the model, hence the name of Gaussian process vector autoregression (GP-VAR). A flexible stochastic volatility specification is used to provide additional flexibility and control for heteroskedasticity. Markov chain Monte Carlo (MCMC) estimation is carried out through an efficient and scalable algorithm which can handle large models. The GP-VAR is illustrated by means of simulated data and in a forecasting exercise with US data. Moreover, we use the GP-VAR to analyze the effects of macroeconomic uncertainty, with a particular emphasis on time variation and asymmetries in the transmission mechanisms.

Citation extraction

68
references
94
in-text mentions
68
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
1Jurado, Ludvigson, and Ng (2015) Measuring uncertainty0.8558662%
2Bloom (2014) Fluctuations in uncertainty0.64422100%
3Chan (2021) Minnesota-type adaptive hierarchical priors for large Bayesian VARs0.64422100%
4Chipman, George, and McCulloch (2010) BART: Bayesian additive regression trees0.64422100%
5Crawford, Flaxman, Runcie, and West (2019) Variable prioritization in nonlinear black box methods: A genetic association case study0.64422100%
6Kalli and Griffin (2018) Bayesian nonparametric vector autoregressive models0.64422100%
7Koop (2013) Forecasting with medium and large Bayesian VARs0.64422100%
8Primiceri (2005) Time varying structural vector autoregressions and monetary policy0.64422100%
9Williams and Rasmussen (2006) Gaussian processes for machine learning, 2: MIT press Cambridge, MA0.58531100%
10Chan (2017) The stochastic volatility in mean model with time-varying parameters: An application to inflation modeling0.5113233%

Showing the top 10 of 68 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
1Forecasting US Inflation Using Bayesian Nonparametric Models0.40511
2BVARs and Stochastic Volatility0.40511
3Theory coherent shrinkage of Time-Varying Parameters in VARs0.40511
40.25cm \@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize\@setfontsize21.92421.92421.92421.92421.92421.92421.92421.92421.92421.924 dpd Dual Interpretation of Machine Learning Forecasts -0.5cm0.40511
5Forecasting Thai inflation from univariate Bayesian regression0.40511
6Macroeconomic Forecasting for the G7 countries under Uncertainty Shocks0.40511