Question: Can you help with question C by using excel ? thanks The Hodrick-Prescott Filter (Decomposition) is a mathematical method used in real business cycle theory
Can you help with question C by using excel ? thanks
The Hodrick-Prescott Filter (Decomposition) is a mathematical method used in real business cycle theory in economics to decompose a time series into its cyclical and trend components. Its formulation is based on the following quadratic programming problem:Let be the logarithm of a time series (hence, itself a time series). The Hodrick-Prescott filtering decomposes into its cyclic component and its trend component (that is, = + ), such that the following quadratic objective functional is minimized:
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
