Bank of England: Boosting Economic Forecast Accuracy by Accounting for Asymmetric Risks and Volatility (Explained)

This episode breaks down a Bank of England research paper that significantly improves economic forecasting methods. It explains how economists use advanced statistical models, factor augmentation, and account for asymmetric loss and volatility to create more accurate predictions. Tune in to understand how these sophisticated adjustments enhance forecast performance across a range of economic variables. This episode explains a real academic paper in plain English for a general audience. Source paper: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2018/predictive-regressions-under-asymmetric-loss-factor-augmentation-and-model-selection.pdf Keywords: Forecasting, Macroeconomics, Asymmetric Loss, Volatility, Predictive Regressions, Central Banking