Enforcing an Admissible Parameter Space for Vector Multiplicative Error Models: The Fundamental Role of Matrix Inequality Constraints.

We derive an admissible parameter space for vector multiplicative error models (vMEMs), explicitly formulating it in terms of the model's matrix parameters through a set of matrix inequalities. Another key contribution is the adoption of constrained maximum likelihood estimation for the multivariate...

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Publicado en:Journal of Financial Econometrics Vol. 24; no. 3; pp. 1 - 29
Autores principales: Karanasos, Menelaos, Xu, Yongdeng, Yfanti, Stavroula, Zopounidis, Constantin
Formato: Artículo
Publicado: Oxford University Press / USA 2026
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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      dt: 2026
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      pub: Oxford University Press / USA
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        10.1093/jjfinec/nbag008
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        atl: Enforcing an Admissible Parameter Space for Vector Multiplicative Error Models: The Fundamental Role of Matrix Inequality Constraints.
      aug:
        au:
          Karanasos, Menelaos
          Xu, Yongdeng
          Yfanti, Stavroula
          Zopounidis, Constantin
        affil:
          Economics and Finance, Brunel University of London, Uxbridge, UK
          Cardiff Business School, Cardiff University, Cardiff, UK
          School of Business and Management, Queen Mary University of London, London, UK
          School of Production, Engineering and Management, Technical University of Crete, Chania, Greece
      su:
        Matrix inequalities
        Maximum likelihood statistics
        Statistical models
      sug:
        subj:
          Matrix inequalities
          Maximum likelihood statistics
          Statistical models
      keyword:
        admissible parameter space
        C32
        C53
        C58
        constrained maximum likelihood estimation
        copyrightHolder:Oxford University Press
        copyrightYear:2026
        G15
        inLanguage:en
        matrix inequalities
        MEM
        multivariate volatility modeling
        publisher:Oxford University Press
        sameAs:https://dx.doi.org/10.1093/jjfinec/nbag008
        second moment structure
        admissible parameter space
        C32
        C53
        C58
        constrained maximum likelihood estimation
        copyrightHolder:Oxford University Press
        copyrightYear:2026
        G15
        inLanguage:en
        matrix inequalities
        MEM
        multivariate volatility modeling
        publisher:Oxford University Press
        sameAs:https://dx.doi.org/10.1093/jjfinec/nbag008
        second moment structure
      ab: We derive an admissible parameter space for vector multiplicative error models (vMEMs), explicitly formulating it in terms of the model's matrix parameters through a set of matrix inequalities. Another key contribution is the adoption of constrained maximum likelihood estimation for the multivariate process, which ensures compliance with these matrix inequalities and addresses the limitations of unconstrained approaches used in previous studies. To demonstrate the effectiveness of the proposed method, we apply it to four empirical cases in financial volatility modeling, emphasizing its practical relevance.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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