The models that we described earlier assume that the different components of a time series add to each other. In some time series, this assumption does not hold but it is reasonable to assume that the components multiply to give the data that we have observed.
Fitting multiplicative models
Fitting multiplicative models is no harder than fitting additive models.
It is important to recognise when multiplicative models are appropriate. However fitting the models is no harder than fitting additive models.
Illustrative example
Personal disposable income
Visitor arrivals in New Zealand