Mechanism diagram · MLP / Linear
How it works
N-BEATS uses stacks of fully-connected blocks. Each block has two outputs: a backcast (reconstruction of the lookback) and a forecast (forward prediction).
The backcast is subtracted from the input before passing to the next block — doubly residual stacking.
Block basis functions can be generic (data-driven) or interpretable (polynomial trend, Fourier seasonality).
Pros and cons on this universe
Pros
- Interpretable variant decomposes output into trend and seasonality components.
- Strong baseline from the M4 competition era.
- Rank #19 IC — still positive.
Cons / failure modes
- Beaten by N-HiTS on the 918-paper crypto benchmark.
- RMSE-focused — directional rank correlation is a side metric.