Bayesian Analysis Predicts Bright Future for Economic Patterns
The article explores the history and future of Bayesian econometrics, focusing on time varying economic patterns. The researchers analyzed publication and citation records to show the increasing popularity of Bayesian econometrics. They also identified key topics in the literature, with a particular emphasis on unobserved components models and time varying patterns. The researchers developed a model to forecast US real GDP growth, incorporating level shifts and stochastic volatility components. Additionally, they compared different models for forecasting inflation to help guide policy decisions.