Two-stage non Gaussian QML estimation of GARCH models and testing the efficiency of the Gaussian QMLE

A-Tier
Journal: Journal of Econometrics
Year: 2011
Volume: 165
Issue: 2
Pages: 246-257

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

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

Abstract

In generalized autoregressive conditional heteroskedastic (GARCH) models, the standard identifiability assumption that the variance of the iid process is equal to 1 can be replaced by an alternative moment assumption. We show that, for estimating the original specification based on the standard identifiability assumption, efficiency gains can be expected from using a quasi-maximum likelihood (QML) estimator based on a non Gaussian density and a reparameterization based on an alternative identifiability assumption. A test allowing to determine whether a reparameterization is needed, that is, whether the more efficient QMLE is obtained with a non Gaussian density, is proposed.

Technical Details

RePEc Handle
repec:eee:econom:v:165:y:2011:i:2:p:246-257
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-25