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Decomposition
Categories: Economics,
The act of splitting a time series into its constituent parts by the use of statistical methods. A typical time series is often regarded as composed of four parts:(a) a long-term movement or trend;(b) oscillations of more or less regular period and amplitude about this trend;(c) a seasonal component;(d) a random, or irregular, component.Any particular series need not exhibit all of these but those which are present are presumed to act in an additive fashion, i.e. are superimposed; and the process of determining them separately is one of decomposition.
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