A martingale decomposition of discrete Markov chains

C-Tier
Journal: Economics Letters
Year: 2015
Volume: 133
Issue: C
Pages: 14-18

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

We consider a multivariate time series whose increments are given from a homogeneous Markov chain. We show that the martingale component of this process can be extracted by a filtering method and establish the corresponding martingale decomposition in closed-form. This representation is useful for the analysis of time series that are confined to a grid, such as financial high frequency data.

Technical Details

RePEc Handle
repec:eee:ecolet:v:133:y:2015:i:c:p:14-18
Journal Field
General
Author Count
1
Added to Database
2026-01-25