Glossary of economics research
Results of search for lag operator follow:
lag operator:
Denoted L. Operates on an expression by moving the subscripts on a time
series back one period, so:
Let = et-1
Why? Well, it can help manipulability of some expressions. For example it
turns out one can could write an MA(2) process (which see) to look like this,
in lag polynomials (which see):
et = (1 + p1L + p2L2)ut
and then divide both sides by the lag polynomial, and get a legal, meaningful,
correct expression.
Contexts: macro; time series; models
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