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Consider the GARCH(1,1)model σt2\sigma _ { t } ^ { 2 }

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Essay

Consider the GARCH(1,1)model σt2\sigma _ { t } ^ { 2 } = ?0 + ?1
ut12u _ { t - 1 } ^ { 2 } + ?1
σt12\sigma _ { t - 1 } ^ { 2 } Show that this model can be rewritten as σt2\sigma _ { t } ^ { 2 } = α01ϕ1\frac { \alpha _ { 0 } } { 1 - \phi _ { 1 } } + ?1( ut12u _ { t - 1 } ^ { 2 } + ?1
ut22u _ { t - 2 } ^ { 2 } + ϕ12\phi _ { 1 } ^ { 2 } ut32u _ { t - 3 } ^ { 2 } + ϕ13\phi _ { 1 } ^ { 3 } ut42u _ { t - 4 } ^ { 2 } + ...). (Hint: use the GARCH(1,1)model but specify it for ϕt12\phi _ { t - 1 } ^ { 2 } ; substitute this expression into the original specification, and so on.)Explain intuitively the meaning of the resulting formulation.

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with the unconditioned stimulus, eventually comes to trigger a conditioned response.

Fear Conditioning

A behavioral paradigm in which organisms learn to predict aversive events, linking a neutral stimulus with a fear-inducing situation.

Aversive CS

A conditioned stimulus that predicts an unpleasant outcome, leading to aversive learning.

Neutral US

Refers to a stimulus that does not initially elicit a strong emotional or physiological response, used in behavioral conditioning experiments.

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