Merging structural and reduced-form models for forecasting

Uniunea Europeana

Forecasting, especially in central banks, is evolving to incorporate a variety of models, following two main approaches: structural and reduced form. The challenge remains to identify which model – or combination of models – is likely to produce more accurate macroeconomic forecasts, especially in an environment that encompasses crisis events. This column argues that merging models becomes the optimal forecasting strategy in a context including crisis episodes. This strategy is superior not

Merging structural and reduced-form models for forecasting https://cepr.org/ - 21.11.2024 02:11

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Merging structural and reduced-form models for forecasting https://cepr.org/ - 21.11.2024 02:11