## Related questions with answers

Question

List the steps in deseasonalizing a monthly time series.

Solution

VerifiedAnswered 1 year ago

Answered 1 year ago

There are five steps in deseasonalizing a monthly time series:

**The first step** is to calculate a centered moving average for each month or quarter. Because of that, we will lose $12$ observations (monthly data) or $4$ observations (quarterly data).

**The second step** is to divide each observed $y_t$ value by the CMA to obtain seasonal ratios.

In **the third step** we have to average the seasonal ratios by month or quarter to get seasonal indexes.

In **the fourth step** the seasonal indexes for each month, quarter, is adjusted such that a sum of all them is $12$, or $4$.

And **the fifth step** to divide each $y_t$ by its seasonal index to get deseasonalized data.

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