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Research Article

Effect of the Logarithmic Transformation on the Trend-cycle Component

Iheanyi S. Iwueze and Anthony C. Akpanta
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In this study we present some solutions to the problems encountered when a time series multiplicative model is linearized by taking the natural logarithm of the observed series. Problems associated with the trend-cycle component, with a view to achieving no alteration (if possible) to the fundamental nature of the original data, are discussed for a class of trending curves which includes the linear, quadratic and exponential growth curves. Necessary and sufficient conditions are derived for the parameters of the linear and quadratic curves. Numerical examples are given to illustrate the results obtained.

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  How to cite this article:

Iheanyi S. Iwueze and Anthony C. Akpanta , 2007. Effect of the Logarithmic Transformation on the Trend-cycle Component. Journal of Applied Sciences, 7: 2414-2422.

DOI: 10.3923/jas.2007.2414.2422


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