Montecarlo simulation of long-term dependent processes: a primer

Borradores de Economia
Número: 
648
Publicado: 
Clasificación JEL: 
C15, C53, C63, G17, G14
Palabras clave: 
Montecarlo simulation, Fractional Brownian Motion, Hurst exponent, long-term dependence

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Luis E. Arango, Luis E. Arango, Luz Adriana Flórez, Carlos Esteban Posada
Oscar Iván Ávila-Montealegre, Anderson Grajales, Juan José Ospina-Tejeiro, Mario Andrés Ramos-Veloza

As a natural extension to León and Vivas (2010) and León and Reveiz (2010) this paper briefly describes the Cholesky method for simulating Geometric Brownian Motion processes with long-term dependence, also referred as Fractional Geometric Brownian Motion