Simple linear trend model(redirected from Simple Linear Trend Models)
Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and grow at a constant amount each period.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Simple Linear Trend Model
A way to predict a trend by taking a previous statistic and plotting out its future movement on the assumption that its growth rate remains the same. For example, if one is estimating a country's GDP according to a simple linear trend model, one takes the previous GDP growth rate (say 3% or -1%) and extrapolates the GDP indefinitely. The problem with simple linear trend models is the fact that many statistics simply do not grow or shrink at the same rate at all times.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved