Detrending with the Hodrick-Prescott filter                      (STB-17: sts5)
-------------------------------------------

	^hpfilter^ varname [^if^ exp ^in^ range] [, ^l^ambda(#) ^s^uffix(str)]

applies the Hodrick-Prescott smoothing filter to varname and stores the
smoothed version in the new variable H_varname (or H_suffix if the
^s^uffix() option is specified).  The Hodrick-Prescott filter minimizes the
squared difference between the original and the filtered series subject to
a smoothness constraint on the filtered series.












Options
-------

^l^ambda(#) specifies the smoothing parameter.  The default is 1600, the 
    value suggested by Prescott for quarterly data.  Higher values of lambda 
    produce smoother results.

^s^uffix(str) specifies the suffix for the filtered series.  The new series
    have names of the form "H_varname" where "H_" indicates the application 
    of the Hodrick-Prescott filter.  Normally the name of the original 
    variable is used as the suffix, but the ^s^uffix option allows the user 
    to override that default.

    Note that ^hpfilter^ obeys the usual rules for applying operators to Stata
    variable names.  Thus, for example, the result of applying ^hpfilter^ to
    "L_x" is "HL_x", not "H_L_x".


Note
----

^hpfilter^ uses Stata's matrix language to apply the Hodrick-Prescott filter.
^hpfilter^ needs to create matrices with dimensions as large as the number
of observations in the input series.


Author
------

        Timothy J. Schmidt
        Federal Reserve Bank of Kansas City
        816-881-2307


Also see
--------

    STB:  sts5 (STB-17)
On-line:  ^help^ for ^hpfilter^
