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Quasi-Maximum Likelihood Estimation for a Class of Continuous-time Long-memory Processes
Journal article   Open access   Peer reviewed

Quasi-Maximum Likelihood Estimation for a Class of Continuous-time Long-memory Processes

Henghsiu Tsai and K. S Chan
Journal of time series analysis, Vol.26(5), pp.691-713
First Version received April 2003
09/2005
DOI: 10.1111/j.1467-9892.2005.00422.x
url
https://autopapers.ssrn.com/sol3/papers.cfm?abstract_id=781660View
Open Access

Abstract

Tsai and Chan (2003) has recently introduced the Continuous-time Auto-Regressive Fractionally Integrated Moving-Average (CARFIMA) models useful for studying long-memory data. We consider the estimation of the CARFIMA models with discrete-time data by maximizing the Whittle likelihood. We show that the quasi-maximum likelihood estimator is asymptotically normal and efficient. Finite-sample properties of the quasi-maximum likelihood estimator and those of the exact maximum likelihood estimator are compared by simulations. Simulations suggest that for finite samples, the quasi-maximum likelihood estimator of the Hurst parameter is less biased but more variable than the exact maximum likelihood estimator. We illustrate the method with a real application. © 2005 Blackwell Publishing Ltd.
Asymptotic efficiency asymptotic normality CARFIMA models fractional Brownian motion Whittle likelihood

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