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Bayesian Markov-Switching Vector Autoregressive Process (2404.11235v3)

Published 17 Apr 2024 in econ.EM

Abstract: This study introduces marginal density functions of the general Bayesian Markov-Switching Vector Autoregressive (MS-VAR) process. In the case of the Bayesian MS-VAR process, we provide closed-form density functions and Monte-Carlo simulation algorithms, including the importance sampling method. The Monte-Carlo simulation method departs from the previous simulation methods because it removes the duplication in a regime vector.

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