The Holt–Winters filter and the one-sided HP filter: A close correspondence

C-Tier
Journal: Economics Letters
Year: 2023
Volume: 222
Issue: C

Score contribution per author:

0.505 = (α=2.02 / 2 authors) × 0.5x C-tier

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

Abstract

We show that the trend of the one-sided HP filter can be asymptotically approximated by the Holt–Winters (HW) filter. The latter is an elegant, moving average representation and facilitates the computation of trends tremendously. We confirm the accuracy of this approximation empirically by comparing the one-sided HP filter with the HW filter for generating credit-to-GDP gaps. We find negligible differences, most of them concentrated at the beginning of the sample.

Technical Details

RePEc Handle
repec:eee:ecolet:v:222:y:2023:i:c:s0165176522003998
Journal Field
General
Author Count
2
Added to Database
2026-01-24