Time‐varying autoregressions with model order uncertainty

Abstract
We explore some aspects of the analysis of latent component structure in non‐stationary time series based on time‐varying autoregressive (TVAR) models that incorporate uncertainty on model order. Our modelling approach assumes that the AR coefficients evolve in time according to a random walk and that the model order may also change in time following a discrete random walk. In addition, we use a conjugate prior structure on the autoregressive coefficients and a discrete uniform prior on model order. Simulation from the posterior distribution of the model parameters can be obtained via standard forward filtering backward simulation algorithms. Aspects of implementation and inference on decompositions, latent structure and model order are discussed for a synthetic series and for an electroencephalogram (EEG) trace previously analysed using fixed order TVAR models.

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