Bayesian Inference for Discretely Sampled Markov Processes with Closed-Form Likelihood Expansions.

The writers suggest a new Bayesian Markov chain Monte Carlo (MCMC) methodology to estimate a wide class of multidimensional jump-diffusion models. They base their approach on the closed-form (CF) likelihood approximations of Ait-Sahalia. They report that the CF likelihood approximation does not in...

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Publicado en:Journal of Financial Econometrics Vol. 8; no. 4; pp. 450 - 481
Autores principales: Stramer, Osnat, Bognar, Matthew, Schneider, Paul
Formato: Artículo
Publicado: Oxford University Press / UK Fall 2010
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Bayesian Inference for Discretely Sampled Markov Processes with Closed-Form Likelihood Expansions.
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          Stramer, Osnat
          Bognar, Matthew
          Schneider, Paul
      su:
        Bayesian analysis
        Markov processes
        Monte Carlo method
        Diffusion processes
        Maximum likelihood statistics
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          Bayesian analysis
          Markov processes
          Monte Carlo method
          Diffusion processes
          Maximum likelihood statistics
      ab: The writers suggest a new Bayesian Markov chain Monte Carlo (MCMC) methodology to estimate a wide class of multidimensional jump-diffusion models. They base their approach on the closed-form (CF) likelihood approximations of Ait-Sahalia. They report that the CF likelihood approximation does not integrate to 1, being very close to 1 when in the center of the distribution but potentially differing markedly from 1 when far in the tails. Proposing an MCMC algorithm that addresses the problems that arise when the CF approximation is applied in a Bayesian context, they demonstrate the efficacy of their approach in a simulation study of the Cox-Ingersoll-Ross and Heston models and apply it to two well-known datasets.
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      doctype: Article
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    language: English
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