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Factor Network Autoregressions

Matteo Barigozzi, Giuseppe Cavaliere, Graziano Moramarco

arXiv 4 Aug 2022 · Econometrics · publishedJournal of Business and Economic Statistics (2025) · 5 citations (OpenAlex)

arXiv:2208.02925 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a factor network autoregressive (FNAR) model for time series with complex network structures. The coefficients of the model reflect many different types of connections between economic agents ("multilayer network"), which are summarized into a smaller number of network matrices ("network factors") through a novel tensor-based principal component approach. We provide consistency and asymptotic normality results for the estimation of the factors, their loadings, and the coefficients of the FNAR, as the number of layers, nodes and time points diverges to infinity. Our approach combines two different dimension-reduction techniques and can be applied to high-dimensional datasets. Simulation results show the goodness of our estimators in finite samples. In an empirical application, we use the FNAR to investigate the cross-country interdependence of GDP growth rates based on a variety of international trade and financial linkages. The model provides a rich characterization of macroeconomic network effects as well as good forecasts of GDP growth rates.

Citation extraction

42
references
133
in-text mentions
42
distinct cited
3
self-citations
55,569
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
1Chen, E.Y., Fan, J. and Zhu, X (2023) Community Network Auto-Regression for High-Dimensional Time Series1.000155100%
2Bai, J (2003) Inferential theory for factor models of large dimensions1.000124100%
3Zhu, X., Pan, R., Li, G., Liu, Y. and Wang, H (2017) Network Vector Autoregression1.000124100%
4Bai, J (2009) Panel data models with interactive fixed effects1.000105100%
5Chen, R., Yang, D. and Zhang, C.H (2022) Factor Models for High-Dimensional Tensor Time Series1.000104100%
6Bai, J. and Ng, S (2006) Confidence Intervals for Diffusion Index Forecasts and Inference for Factor-Augmented Regressions1.00053100%
7Wang, D., Zheng, Y., Lian, H. and Li, G (2022) High-Dimensional Vector Autoregressive Time Series Modeling via Tensor Decomposition1.00053100%
8Barigozzi, M (2022) On estimation and inference of large approximate dynamic factor models via the principal component analysis, ArXiv:2211.01921 self0.874192100%
9Barigozzi, M., He, Y., Li, L. and Trapani, L (2023) Statistical Inference for Large-dimensional Tensor Factor Model by Iterative Projections, arXiv:2206.09800 self0.81142100%
10Zhu, X., Xu, G. and Fan, J (2023) Simultaneous estimation and group identification for network vector autoregressive model with heterogeneous nodes0.64422100%

Showing the top 10 of 42 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
10.5 in 1925Cross-Sectional Dynamics Under Network Structure: Theory and Macroeconomic Applications0.40511
2Forecasting Oil Volatility through Network Models with GARCH-Informed Correlation Weights0.40511
3Uncovering Sparse Financial Networks with Information Criteria0.40511
4Time-Varying Model Averaging of Multi-layer Network Vector Autoregressions0.40511