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
din zilele anterioare