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Scenario Analysis with Multivariate Bayesian Machine Learning Models

Michael Pfarrhofer, Anna Stelzer

arXiv 12 Feb 2025 · Econometrics · 1 citations (OpenAlex)

arXiv:2502.08440 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We present an econometric framework that adapts tools for scenario analysis, such as variants of conditional forecasts and generalized impulse responses, for use with dynamic nonparametric models. The proposed algorithms are based on predictive simulation and sequential Monte Carlo methods. Their utility is demonstrated with three applications: (1) conditional forecasts based on stress test scenarios, measuring (2) macroeconomic risk under varying financial stress, and estimating the (3) asymmetric effects of financial shocks in the US and their international spillovers. Our empirical results indicate the importance of nonlinearities and asymmetries in relationships between macroeconomic and financial variables.

Citation extraction

73
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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
1Breitenlechner M, Georgiadis G, and Schumann B (2022) What goes around comes around: How large are spillbacks from US monetary policy?1.00063100%
2Clark TE, Huber F, Koop G, Marcellino M, and Pfarrhofer M (2023) Tail forecasting with multivariate Bayesian additive regression trees1.00053100%
3Antolin-Diaz J, Petrella I, and Rubio-Ramŕez JF (2021) Structural scenario analysis with SVARs0.9568388%
4Chan JC, Pettenuzzo D, Poon A, and Zhu D (2025) Conditional Forecasts in Large Bayesian VARs with Multiple Equality and Inequality Constraints0.9285480%
5Bańbura M, Giannone D, and Lenza M (2015) Conditional forecasts and scenario analysis with vector autoregressions for large cross-sections0.9285380%
6Chipman HA, George EI, and McCulloch RE (2010) BART: Bayesian additive regression trees0.8434375%
7Crump RK, Eusepi S, Giannone D, Qian E, and Sbordonea A (2025) A Large Bayesian VAR of the US Economy0.8434375%
8Goncalves S, Herrera AM, Kilian L, and Pesavento E (2024) State-dependent local projections0.84333100%
9Hauzenberger N, Huber F, Marcellino M, and Petz N (2025) b), Gaussian process vector autoregressions and macroeconomic uncertainty0.84333100%
10Huber F, Koop G, Onorante L, Pfarrhofer M, and Schreiner J (2023) Nowcasting in a pandemic using non-parametric mixed frequency VARs0.84333100%

Showing the top 10 of 74 scored citations.