Constructing Forecast Confidence Bands During the Financial Crisis /

We derive forecast confidence bands using a Global Projection Model covering the United States, the euro area, and Japan. In the model, the price of oil is a stochastic process, interest rates have a zero floor, and bank lending tightening affects the United States. To calculate confidence intervals...

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Detalles Bibliográficos
Autor Principal: Clinton, Kevin
Outros autores: Chen, Huigang, Johnson, Marianne, Kamenik, Ondrej
Formato: Revista
Idioma:English
Publicado: Washington, D.C. : International Monetary Fund, 2009.
Series:IMF Working Papers; Working Paper ; No. 2009/214
Acceso en liña:Full text available on IMF
Descripción
Summary:We derive forecast confidence bands using a Global Projection Model covering the United States, the euro area, and Japan. In the model, the price of oil is a stochastic process, interest rates have a zero floor, and bank lending tightening affects the United States. To calculate confidence intervals that respect the zero interest rate floor, we employ Latin hypercube sampling. Derived confidence bands suggest non-negligible risks that U.S. interest rates might stay near zero for an extended period, and that severe credit conditions might persist.
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Descrición Física:1 online resource (23 pages)
Formato:Mode of access: Internet
ISSN:1018-5941
Acceso:Electronic access restricted to authorized BRAC University faculty, staff and students