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FARS: Factor Augmented Regression Scenarios in R

Gian Pietro Bellocca, Ignacio Garrón, Vladimir Rodríguez-Caballero, Esther Ruiz

arXiv 14 Jul 2025 · Statistics — Computation · 1 citations (OpenAlex)

arXiv:2507.10679 · PDF · DOI · OpenAlex · Extracted main text

Abstract

In the context of macroeconomic/financial time series, the FARS package provides a comprehensive framework in R for the construction of conditional densities of the variable of interest based on the factor-augmented quantile regressions (FA-QRs) methodology, with the factors extracted from multi-level dynamic factor models (ML-DFMs) with potential overlapping group-specific factors. Furthermore, the package also allows the construction of measures of risk as well as modeling and designing economic scenarios based on the conditional densities. In particular, the package enables users to: (i) extract global and group-specific factors using a flexible multi-level factor structure; (ii) compute asymptotically valid confidence regions for the estimated factors, accounting for uncertainty in the factor loadings; (iii) obtain estimates of the parameters of the FA-QRs together with their standard deviations; (iv) recover full predictive conditional densities from estimated quantiles; (v) obtain risk measures based on extreme quantiles of the conditional densities; and (vi) estimate the conditional density and the corresponding extreme quantiles when the factors are stressed.

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82
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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
1Gloria González-Rivera and C. Vladimir Rodríguez-Caballero and Esthe… (2024) Expecting the Unexpected: Stressed Scenarios for Economic Growth self1.00073100%
2Jörg Breitung and Sandra Eickmeier (2016) Analyzing International Business and Financial Cycles Using Multi-Level Factor Models: A Comparison of Alternative Approaches0.87452100%
3Tobias Adrian and Nina Boyarchenko and Domenico Giannone (2019) Vulnerable Growth0.81142100%
4Bai, Jushan (2003) Inferential Theory for Factor Models of Large Dimensions0.73732100%
5Jushan Bai and Serena Ng (2013) Principal Components Estimation and Identification of Static Factors0.73732100%
6Gloria González-Rivera and Javier Maldonado and Esther Ruiz (2019) Growth in Stress self0.73732100%
7Ando, Tomohiro and Tsay, Ruey S (2011) Quantile Regression Models with Factor-Augmented Predictors and Information Criterion0.64422100%
8Adelchi Azzalini and Antonella Capitanio (2003) Distributions Generated by Perturbation of Symmetry With Emphasis on a Multivariate Skew t-Distribution0.64422100%
9Jushan Bai and Serena Ng (2008) Forecasting Economic Time Series Using Targeted Predictors0.64422100%
10In Choi and Dukpa Kim and Yun Jung Kim and Noh Sun Kwark (2018) A Multilevel Factor Model: Identification, Asymptotic Theory and Applications0.64422100%

Showing the top 10 of 56 scored citations.