460,469 research outputs found
Housing Market Crash Prediction Using Machine Learning and Historical Data
The 2008 housing crisis was caused by faulty banking policies and the use of credit derivatives of mortgages for investment purposes. In this project, we look into datasets that are the markers to a typical housing crisis. Using those data sets we build three machine learning techniques which are, Linear regression, Hidden Markov Model, and Long Short-Term Memory. After building the model we did a comparative study to show the prediction done by each model. The linear regression model did not predict a housing crisis, instead, it showed that house prices would be rising steadily and the R-squared score of the model is 0.76. The Hidden Markov Model predicted a fall in the house prices and the R-squared score for this model is 0.706. Lastly, the Long Short-Term Memory showed that the house price would fall briefly but would stabilize after that. Also, fall is not as sharp as what was predicted by the HMM model. The R- squared scored for this model is 0.9, which is the highest among all other models. Although the R-squared score doesn’t say how accurate a model it definitely says how closely a model fits the data. From our model R-square score the model that best fits the data was LSTM. As the dataset used in all the models are the same therefore it is safe to say the prediction made by LSTM is better than the other ones
Recommended from our members
A Second Look at the 2007-08 Food Price Crisis: Considering the Impact of Endogenous Dynamics on Food Prices
This paper offers an alternative to the conventional explanation of the 2007-08 food price crisis in terms of escalating demand or dwindling supply. Instead, its focus is on the legal-institutional structure of commodity futures markets, which has witnessed a drastic alteration in the role of speculators. These have transformed from “market makers” (that keep commodity futures markets liquid by arbitraging on price fluctuations) to "market breakers". Index speculation, in particular, has had the effect of muddling information about market "fundamentals" because of the need – brought about by commodity index swaps – for swap dealers to hedge the fluctuations of an index of commodity prices by opening and periodically rolling over long-only positions. This periodical rollover to comply with contractual obligations, rather than in response to anticipated fluctuations in the availability of a commodity in the future, can induce a "contango bias" in the commodity futures market that, in turn, might have given the wrong signals to market operators, leading to a condition of induced (rather than pre-existing) scarcity and to an increase in spot prices in the 2007-08 crisis
Corporate Financial Policies and Performance Prior to Currency Crises
Using company level data from 17 countries that have suffered a currency crisis during the past decade, this paper documents that firms have increasing leverage and declining profitability prior to a crisis. After sorting companies into two groups based on their exchange rate beta, we show that companies that benefit from currency depreciations have higher leverage, lower earnings to revenue ratios and lower interest coverage ratios compared to firms that are harmed by currency depreciations. These results are consistent with the recent literature that puts the financial policies and performance of corporations as the central issue in currency crisis.http://deepblue.lib.umich.edu/bitstream/2027.42/39770/3/wp386.pd
Britain's fiscal squeeze: the choices ahead
The economic and financial crisis that has unfolded over the last two years has caused a dramatic deterioration in the UK's public finances, with public sector borrowing set to peak this year at a level not seen since the Second World War and public sector indebtedness set to climb to levels not seen since the late 1960s.
With the next general election less than a year away, the Government and the main opposition parties alike will be under pressure to offer more detailed proposals to repair the public finances. This note discusses some of the key questions all the parties will have to grapple with
El crédito comercial y la crisis crediticia: un análisis descriptivo en Europa; Reino Unido y España
El uso de crédito comercial como forma de financiar el corto plazo ha aumentando en los últimos años, las
grandes empresas utilizan más días del que necesitan para realizar los pagos a las pequeñas empresas, lo que
provoca fatales consecuencias financieras para los proveedores. Estos problemas financieros no son nuevos, pero
con la restricción pronunciada del crédito los problemas se agudizan debido a que el uso masivo del crédito
comercial repercute negativamente en los proveedores cuya insolvencia y riesgo de quiebra aumentan. En este
trabajo se revisan de forma descriptiva el uso del crédito comercial en la crisis crediticia. Las principales
contribuciones de la ponencia son dos. En primer lugar, mostrar las consecuencias financieras por la utilización
del crédito comercial y, concretamente, en la crisis crediticia, y cómo el gobierno de Reino Unido desarrolla
políticas públicas de pago para reducir el efecto negativo de los impagados. En segundo lugar, estudiar y
comparar la situación de los países europeos en términos de pago a los proveedores y, en particular, el caso de
Reino Unido, pero también el caso Español.The use of trade credit as a short-term financing is increasing in the last years; large firms use more days to pay
small firms than they need, which causes financial fatal consequences to suppliers. These financial problems are
not new, but with the credit crunch they are coming up because the massive use of the trade credit impacts
negatively on suppliers whose insolvency and bankruptcy risks increase. In this paper we review in a descriptive
way the use of trade credit in the credit crunch. The main contributions of the paper are two. Firstly, we show the
financial consequences of the use of trade credit, and specifically in credit crisis, and how UK government
develop public payment policies to reduce the negative effect of delete payments. Secondly, we study and
compare the situation of European countries in terms of payment to suppliers, and in particular the case of UK,
but also Spanish case
The Pricing of Non-Price Terms in Sovereign Bonds: The Case of the Greek Guarantees
In March 2012, Greece conducted one of the biggest and most brutal sovereign debt restructurings ever, asking holders of Greek government bonds to take net present value haircuts of near 80 percent. Greece forced acquiescence to its terms from a large number of its bonds by using a variety of legal strong-arm tactics. With the vast majority of Greek bonds, the tactics worked. There were, however, thirty-six bonds guaranteed by the Greek state, which, because of the weakness of the underlying companies, were effectively obligations of the Greek state. Yet, on these thirty six bonds, even though Greece desperately needed every euro of respite it could get, no restructuring was even attempted. Why not? The answer we received was that the guarantees escaped the restructuring because their contractual provisions made them much harder to restructure than the ordinary Greek government bonds. Assuming this contract-based claim to be true, the foregoing, in combination with the Euro area crisis of 2010–2014 throws up an opportunity to test the extent to which markets price legal differences in bond contract terms. We report evidence that the markets did price in at least some of the advantage that guaranteed bonds had over ordinary sovereign bonds in the months immediately prior to the March 2012 restructuring
Detecting early signs of the 2007-2008 crisis in the world trade
Since 2007, several contributions have tried to identify early-warning
signals of the financial crisis. However, the vast majority of analyses has
focused on financial systems and little theoretical work has been done on the
economic counterpart. In the present paper we fill this gap and employ the
theoretical tools of network theory to shed light on the response of world
trade to the financial crisis of 2007 and the economic recession of 2008-2009.
We have explored the evolution of the bipartite World Trade Web (WTW) across
the years 1995-2010, monitoring the behavior of the system both before and
after 2007. Our analysis shows early structural changes in the WTW topology:
since 2003, the WTW becomes increasingly compatible with the picture of a
network where correlations between countries and products are progressively
lost. Moreover, the WTW structural modification can be considered as concluded
in 2010, after a seemingly stationary phase of three years. We have also
refined our analysis by considering specific subsets of countries and products:
the most statistically significant early-warning signals are provided by the
most volatile macrosectors, especially when measured on developing countries,
suggesting the emerging economies as being the most sensitive ones to the
global economic cycles.Comment: 18 pages, 9 figure
Central bank independence, bureaucratic corruption and fiscal responses - empirical evidence
This paper analyses the impact of bureaucratic corruption on fiscal policy outcomes for economies that have constituted to a greater or lessen extent independent central banks. The adverse implications of corruption on debt accumulation are verified using a cross-sectional setting of 77 developed and developing countries. Approximating central bank independence as that point in time that a major central bank reform took effect, we find that more corruption leads to higher debt accumulation. More importantly, complementing the analysis with a measure for the level of independence each reform gave strengthens the results; the impact of corruption is greater, the higher the independence that was granted. The findings are robust to different subsets of the sample and different sets of control variables. Suboptimal institutional quality poses difficulties on the achievement of a balanced debt process, which could obstacle price stability, despite the constitution of independent central banks
- …