A note on the two assumptions of standard unobserved components models

C-Tier
Journal: Economics Letters
Year: 2008
Volume: 100
Issue: 1
Pages: 123-125

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

In this note, I consider a general class of unobserved components (UC) models and derive a relevant inequality. This inequality implies that either of the two assumptions of standard UC models, namely, a random walk trend and uncorrelated shocks, is not satisfied if the impulse response measure introduced by [Campbell, J.Y. and N.G. Mankiw, 1987a. Are output fluctuations transitory? Quarterly Journal of Economics 102, 857-880, Campbell, J.Y. and N.G. Mankiw, 1987b. Permanent and transitory components in macroeconomic fluctuations, American Economic Review (Papers and Proceedings) 77, 111-117] is greater than 1.

Technical Details

RePEc Handle
repec:eee:ecolet:v:100:y:2008:i:1:p:123-125
Journal Field
General
Author Count
1
Added to Database
2026-01-26