AUTOREGRESSIVE PROCESSES WITH A TIME DEPENDENT VARIANCE

Abstract
We study nonstationary autoregressive time series where the variance of the residual process is allowed to depend on time. In earlier publications the variance has been modelled by a step function. We look at more general classes of functions and propose two estimates of the autoregressive coefficients, both of which are consistent under weak assumptions. We also show how it is possible to obtain an estimate in practice using an iterative regression procedure.

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