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.

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

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.

| improve this answer | |

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.