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2011 Dec 01
1
Estimation of AR(1) Model with Markov Switching
...-1) f_s1 <- rep(0,nrow(X)-1) f <- rep(0,nrow(X)-1) logf <- rep(0, nrow(X)-1) p_s0_t[1] <- p0_s0 p_s1_t[1] <- p0_s1 # initiate hamilton filter for(i in 2:nrow(X)) { # calculate prior probabilities using the TPT # TPT for this example gives us # p_si_t_1 = p_si_t_1_si * p_si_t + p_si_t_1_sj * p_si_t # where p_si_t_1 is the prob state_t = i given information @ time t-1 # p_si_t_1_sj is the prob state_t = i given state_t_1 = j, and all info @ time t-1 # p_si_t is the prob state_t = i given information @ time t # in this simple example p_si_t_1_sj = p_si_sj p_s0_t_1[i] <- (p_s0_s0 *...