Near-integrated GARCH sequences
Berkes, István ; Horváth, Lajos ; Kokoszka, Piotr
Ann. Appl. Probab., Tome 15 (2005) no. 1A, p. 890-913 / Harvested from Project Euclid
Motivated by regularities observed in time series of returns on speculative assets, we develop an asymptotic theory of GARCH(1,1) processes {yk} defined by the equations ykkɛk, σk2=ω+αyk−12+βσk−12 for which the sum α+β approaches unity as the number of available observations tends to infinity. We call such sequences near-integrated. We show that the asymptotic behavior of near-integrated GARCH(1,1) processes critically depends on the sign of γ:=α+β−1. We find assumptions under which the solutions exhibit increasing oscillations and show that these oscillations grow approximately like a power function if γ≤0 and exponentially if γ>0. We establish an additive representation for the near-integrated GARCH(1,1) processes which is more convenient to use than the traditional multiplicative Volterra series expansion.
Publié le : 2005-02-14
Classification:  Asymptotic distribution,  near-integrated GARCH,  62M10,  91B84
@article{1107271671,
     author = {Berkes, Istv\'an and Horv\'ath, Lajos and Kokoszka, Piotr},
     title = {Near-integrated GARCH sequences},
     journal = {Ann. Appl. Probab.},
     volume = {15},
     number = {1A},
     year = {2005},
     pages = { 890-913},
     language = {en},
     url = {http://dml.mathdoc.fr/item/1107271671}
}
Berkes, István; Horváth, Lajos; Kokoszka, Piotr. Near-integrated GARCH sequences. Ann. Appl. Probab., Tome 15 (2005) no. 1A, pp.  890-913. http://gdmltest.u-ga.fr/item/1107271671/