Stress indexes have widely varying signal benefits, Fed paper says
Methodology must improve to provide robust forecasts, authors argue
Central bankers need a methodology to identify coincident systemic conditions in a "timely" way, and to forecast adverse developments, a working paper published this month by the Federal Reserve Bank of Cleveland argues.
In Evaluating the information value for measures of systemic conditions, Mikhail Oet, John Dooley, Dieter Gramlich, Peter Sarlin and Stephen Ong present what they say is a general-purpose evaluation framework for assessing measurements of systemic conditions.
They then apply
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