A REPRESENTATION THEORY FOR A CLASS OF VECTOR AUTOREGRESSIVE MODELS FOR FRACTIONAL PROCESSES

B-Tier
Journal: Econometric Theory
Year: 2008
Volume: 24
Issue: 3
Pages: 651-676

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

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

Abstract

Based on an idea of Granger (1986, Oxford Bulletin of Economics and Statistics 48, 213–228), we analyze a new vector autoregressive model defined from the fractional lag operator 1 − (1 − L)d. We first derive conditions in terms of the coefficients for the model to generate processes that are fractional of order zero. We then show that if there is a unit root, the model generates a fractional process Xt of order d, d > 0, for which there are vectors β so that β‼Xt is fractional of order d − b, 0 < b ≤ d. We find a representation of the solution that demonstrates the fractional properties. Finally we suggest a model that allows for a polynomial fractional vector, that is, the process Xt is fractional of order d, β‼Xt is fractional of order d − b, and a linear combination of β‼Xt and ΔbXt is fractional of order d − 2b. The representations and conditions are analogous to the well-known conditions for I(0), I(1), and I(2) variables.

Technical Details

RePEc Handle
repec:cup:etheor:v:24:y:2008:i:03:p:651-676_08
Journal Field
Econometrics
Author Count
1
Added to Database
2026-01-25