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Machine Learning the Macroeconomic Effects of Financial Shocks

Niko Hauzenberger, Florian Huber, Karin Klieber, Massimiliano Marcellino

arXiv 10 Dec 2024 · Econometrics · publishedEconomics Letters (2025) · 4 citations (OpenAlex)

arXiv:2412.07649 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a method to learn the nonlinear impulse responses to structural shocks using neural networks, and apply it to uncover the effects of US financial shocks. The results reveal substantial asymmetries with respect to the sign of the shock. Adverse financial shocks have powerful effects on the US economy, while benign shocks trigger much smaller reactions. Instead, with respect to the size of the shocks, we find no discernible asymmetries.

Citation extraction

19
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34
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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
1Barnichon et al (2022) Are the effects of financial market disruptions big or small?0.92843100%
2Hauzenberger et al (2024) Bayesian neural networks for macroeconomic analysis0.87452100%
3Mumtaz and Piffer (2022) Impulse response estimation via flexible local projections0.84333100%
gilchrist2012creditunmatched citation key gilchrist2012credit0.73732100%
5Brunnermeier and Sannikov (2014) A macroeconomic model with a financial sector0.64422100%
6Kilian and Lütkepohl (2017) Structural vector autoregressive analysis0.51121100%
7Balke (2000) Credit and economic activity: credit regimes and nonlinear propagation of shocks0.40511100%
8Barnichon et al (2016) Theory ahead of measurement? assessing the nonlinear effects of financial market disruptions0.40511100%
9Bhadra et al (2020) Horseshoe regularisation for machine learning in complex and deep models0.40511100%
10Carvalho et al (2009) Handling sparsity via the horseshoe0.40511100%

Showing the top 10 of 21 scored citations. 1 of these could not be matched to a bibliography entry, so only the citation key is shown.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
10.09cm 24.9522 dpd Opening the Black Box of Local Projections . 0.4cm0.73732
2Semiparametric inference for impulse response functions using double/debiased machine learning0.40511
3A Nonparametric Approach to Augmenting a Bayesian VAR with Nonlinear Factors0.40511
4Nonlinear Dynamic Factor Analysis With a Transformer Network0.40511