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Distributional Vector Autoregression: Eliciting Macro and Financial Dependence

Yunyun Wang, Tatsushi Oka, Dan Zhu

arXiv 9 Mar 2023 · Econometrics

arXiv:2303.04994 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Vector autoregression is an essential tool in empirical macroeconomics and finance for understanding the dynamic interdependencies among multivariate time series. In this study, we expand the scope of vector autoregression by incorporating a multivariate distributional regression framework and introducing a distributional impulse response function, providing a comprehensive view of dynamic heterogeneity. We propose a straightforward yet flexible estimation method and establish its asymptotic properties under weak dependence assumptions. Our empirical analysis examines the conditional joint distribution of GDP growth and financial conditions in the United States, with a focus on the global financial crisis. Our results show that tight financial conditions lead to a multimodal conditional joint distribution of GDP growth and financial conditions, and easing financial conditions significantly impacts long-term GDP growth, while improving the GDP growth during the global financial crisis has limited effects on financial conditions.

Citation extraction

52
references
79
in-text mentions
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distinct cited
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self-citations
17,072
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
1Adrian, T., N. Boyarchenko, and D. Giannone (2021) Multimodality in macrofinancial dynamics1.00074100%
2Rossi, B. and T. Sekhposyan (2019) Alternative tests for correct specification of conditional predictive densities0.87452100%
3van der Vaart, A. and J. Wellner (1996) Weak convergence and empirical processes: with applications to statistics0.87452100%
4Sims, C. A (1980) Macroeconomics and Reality0.81142100%
5Blanchard, O. J. and D. Quah (1989) The dynamic effects of aggregate demand and supply disturbances0.64422100%
6Chavleishvili, S. and S. Manganelli (2019) Forecasting and stress testing with quantile vector autoregression0.64422100%
7Chernozhukov, V., I. Fernández-Val, and B. Melly (2013) Inference on counterfactual distributions0.64422100%
8Jordà, Ò (2005) Estimation and inference of impulse responses by local projections0.64422100%
9Montes-Rojas, G (2019) Multivariate quantile impulse response functions0.64422100%
10Plagborg-Mller, M. and C. K. Wolf (2021) Local projections and vars estimate the same impulse responses0.64422100%

Showing the top 10 of 52 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
1Inflation Target at Risk: A Time-varying Parameter Distributional Regression0.40511
2Regression Adjustment for Estimating Distributional Treatment Effects in Randomized Controlled Trials0.40511