Lesson 13: Fractional Differencing and Threshold Models

Overview

This week we'll look at two variations of ARIMA models - long memory models (fractional differences) and threshold models (regime switching models).

Objectives

After successfully completing this lesson, you should be able to:

  • Identify and interpret simple fractionally differenced models
  • Recognize when to take first differences vs. fractional differences
  • Identify and interpret ARFIMA models
  • Apply different models within two intervals of a time series