Normalized Models
Archibald (1984, 1990) discussed the stable region for the normalized ver- In Chap. 8, we showed that the normalized models can be written in state space form with the state vector xt = (ℓt, bt, s1,t,..., sm−1,t)′, where si,t is the estimate of the seasonal factor for the ith month ahead made at time t. Note that sm,t ≡ s0,t = 1 − s1,t − · · · − sm−1,t. Following Roberts (1982, Sect. 3), the seasonal updating is defined as follows:
The level and trend equations are updated as with the standard model. Then w′ = [1, 1, 1, 0′m−2],
10.2 Stability and the Parameter Space 159
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