Shocks in nonlinear models absorbed at lightning speed, changing forecasting game.
The article explores how shocks are absorbed in nonlinear models by studying the speed at which their effects are felt in time series data. The researchers use specific models to show how shocks impact variables like output growth, income, consumption, and investment. They find that while many studies focus on the persistence and magnitude of shocks, less attention has been given to how quickly these effects are absorbed by the time series.
