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Likelihood-Based Ergodicity Transformations in Time Series Analysis

Anthony Britto

arXiv 16 Jan 2026 · Econometrics

arXiv:2601.11237 · PDF · DOI · OpenAlex · Extracted main text

Abstract

Time series often exhibit non-ergodic behaviour that complicates forecasting and inference. This article proposes a likelihood-based approach for estimating ergodicity transformations that addresses such challenges. The method is broadly compatible with standard models, including Gaussian processes, ARMA, and GARCH. A detailed simulation study using geometric and arithmetic Brownian motion demonstrates the ability of the approach to recover known ergodicity transformations. A further case study on the large macroeconomic database FRED-QD shows that incorporating ergodicity transformations can provide meaningful improvements over conventional transformations or naive specifications in applied work.

Citation extraction

28
references
44
in-text mentions
28
distinct cited
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self-citations
6,853
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Hamilton, James D (1994) Time Series Analysis0.87472100%
2G. E. P. Box and D. R. Cox (1964) An Analysis of Transformations0.81142100%
3McCracken, Michael and Ng, Serena (2020) FRED-QD: A Quarterly Database for Macroeconomic Research0.69351100%
4Hyndman, Rob J. and Athanasopoulos, G (2018) Forecasting: Principles and Practice0.64422100%
5Peters, O. and Klein, W (2013) Ergodicity Breaking in Geometric Brownian Motion0.51121100%
6Xiao, Han and Wu, Wei Biao (2012) Covariance Matrix Estimation for Stationary Time Series0.51121100%
7Bańbura, Marta and Modugno, Michele (2012) Maximum Likelihood Estimation of Factor Models on Datasets with Arbitrary Pattern of Missing Data0.40511100%
8Bel, G. and Barkai, E (2005) Weak Ergodicity Breaking in the Continuous-Time Random Walk0.40511100%
9Caporale, Guglielmo Maria and Cuñado, Juncal and Gil‐Alana, Luis A (2012) Modelling Long‐Run Trends and Cycles in Financial Time Series Data0.40511100%
10Chapman, S. C. and Stainforth, D. A. and Watkins, N. W (2013) On Estimating Local Long-Term Climate Trends0.40511100%

Showing the top 10 of 28 scored citations.