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I'm reading a paper and at some point the author writes :

"We do this by decomposing monthly real crude oil prices and analyzing the effect of the smooth part on the degree of the stock market instability."

What does he mean by "smooth part"? Is it the same meaning we have when dealing with integers?(factoring to prime numbers) Or is it something else? I don't understand what "the smooth part" means and how it is of any importance.

Sorry in advance if the question is too beginner.

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  • $\begingroup$ Doesn't the rest of the paper makes it clear? (e.g. on p77 - "father" and "mother" wavelets) $\endgroup$
    – 410 gone
    Commented Dec 6, 2015 at 15:36

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I'm guessing the author has split the series between a trend component and noise component, for example with the HP-filter, and studies the smooth trend component.

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