A frequency decomposition of approximation errors in stochastic discount factor models.

This article extends the work of Hansen and Jagannathan by showing how to decompose approximation errors in stochastic discount factor models by frequency. This decomposition is applied to a number of consumption-based discount factor models in order to investigate how well they fit at low frequenc...

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Publicado en:International Economic Review Vol. 42; no. 2; pp. 473 - 504
Autor principal: Cogley, Timothy
Formato: Artículo
Publicado: Wiley-Blackwell May 2001
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Acceso en línea:Ver este registro en EBSCOhost
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        10.1111/1468-2354.00118
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        atl: A frequency decomposition of approximation errors in stochastic discount factor models.
      aug:
        au: Cogley, Timothy
      su:
        Approximation theory
        Decomposition method
        Stochastic processes
        Error analysis in mathematics
        Mathematical models of consumption
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        subj:
          Approximation theory
          Decomposition method
          Stochastic processes
          Error analysis in mathematics
          Mathematical models of consumption
      ab: This article extends the work of Hansen and Jagannathan by showing how to decompose approximation errors in stochastic discount factor models by frequency. This decomposition is applied to a number of consumption-based discount factor models in order to investigate how well they fit at low frequencies. There is some evidence of improved fit at low frequencies, but only in models with high degrees of risk aversion. In models with low degrees of risk aversion, approximation errors at low frequencies are just as severe as those at high frequencies. Reprinted by permission of the publisher.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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