A comparison of forecasting procedures for macroeconomic series: the contribution of structural break models

This paper compares the forecasting performance of different models which have been proposed for forecasting in the presence of structural breaks. These models differ in their treatment of the break process, the parameters defining the model which applies in each regime and the out-of-sample probability of a break occurring. In an extensive empirical evaluation involving many important macroeconomic time series, we demonstrate the presence of structural breaks and their importance for forecasting in the vast majority of cases. However, we find no single forecasting model consistently works best in the presence of structural breaks. In many cases, the formal modeling of the break process is important in achieving good forecast performance. However, there are also many cases where simple, rolling OLS forecasts perform well.forecasting, change-points, Markov switching, Bayesian inference

Understanding the self in relation to others: Infants spontaneously map another's face to their own at 16–26 months

The current study probed whether infants understand themselves in relation to others. Infants aged 16-26 months (n = 102) saw their parent wearing a sticker on their forehead or cheek, depending on experimental condition, placed unwitnessed by the child. Infants then received a sticker themselves, and their spontaneous behavior was coded. Regardless of age, from 16 months, all infants who placed the sticker on their cheek or forehead, placed it on the location on their own face matching their parent's placement. This shows that infants as young as 16 months of age have an internal map of their face in relation to others that they can use to guide their behavior. Whether infants placed the sticker on the matching location was related to other measures associated with self-concept development (the use of their own name and mirror self-recognition), indicating that it may reflect a social aspect of children's developing self-concept, namely their understanding of themselves in relation and comparison to others. About half of the infants placed the sticker on themselves, while others put it elsewhere in the surrounding, indicating an additional motivational component to bring about on themselves the state, which they observed on their parent. Together, infants' placement of the sticker in our task suggests an ability to compare, and motivation to align, self and others

Core-Core Dynamics in Spin Vortex Pairs

We investigate magnetic nano-pillars, in which two thin ferromagnetic nanoparticles are separated by a nanometer thin nonmagnetic spacer and can be set into stable spin vortex-pair configurations. The 16 ground states of the vortex-pair system are characterized by parallel or antiparallel chirality and parallel or antiparallel core-core alignment. We detect and differentiate these individual vortex-pair states experimentally and analyze their dynamics analytically and numerically. Of particular interest is the limit of strong core-core coupling, which we find can dominate the spin dynamics in the system. We observe that the 0.2 GHz gyrational resonance modes of the individual vortices are replaced with 2-6 GHz range collective rotational and vibrational core-core resonances in the configurations where the cores form a bound pair. These results demonstrate new opportunities in producing and manipulating spin states on the nanoscale and may prove useful for new types of ultra-dense storage devices where the information is stored as multiple vortex-core configurations

Real-time prediction with U.K. monetary aggregates in the presence of model uncertainty

A popular account for the demise of the U.K.’s monetary targeting regime in the 1980s blames the fluctuating predictive relationships between broad money and inflation and real output growth. Yet ex post policy analysis based on heavily revised data suggests no fluctuations in the predictive content of money. In this paper, we investigate the predictive relationships for inflation and output growth using both real-time and heavily revised data. We consider a large set of recursively estimated vector autoregressive (VAR) and vector error correction models (VECM). These models differ in terms of lag length and the number of cointegrating relationships. We use Bayesian model averaging (BMA) to demonstrate that real-time monetary policymakers faced considerable model uncertainty. The in-sample predictive content of money fluctuated during the 1980s as a result of data revisions in the presence of model uncertainty. This feature is only apparent with real-time data as heavily revised data obscure these fluctuations. Out-of-sample predictive evaluations rarely suggest that money matters for either inflation or real output. We conclude that both data revisions and model uncertainty contributed to the demise of the U.K.’s monetary targeting regime