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Signal equation estimate with OLS

Posted: Sat Aug 22, 2009 7:26 am
by Aktar
I want to estimate a mean rerverting model with kalman filter like :

@signal rs = sv1 + sv2*cds + [var = exp(c(1))]

@state sv1 = c(3) + c(4)*sv1(-1) + [var = exp(c(2))]
@state sv2 = c(6) + c(7)*sv2(-1) + [var = exp(c(5))]

for starting values i run OLS estimation on the signal equation : but the beta that i find it is just for c(3) and c(6) ? how can i find c(1) c(2) c(5) and c(4) c(7) ?

Re: Signal equation estimate with OLS

Posted: Sun Aug 23, 2009 1:50 pm
by startz
You can start with zeros, or something else arbitrary, and see if it works.