I am using the `forecast`

package in R. I wanted to know how the `ets()`

function finds the value of $alpha$, $beta$ and $gamma$?

Is it by minimizing the SSE or some other criteria?

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#### Best Answer

The default is MLE. The argument `opt.crit`

controls the optimization criterion. from the help file:

opt.crit

Optimization criterion. One of "mse" (Mean Square Error), "amse" (Average MSE over first nmse forecast horizons), "sigma" (Standard deviation of residuals), "mae" (Mean of absolute residuals), or "lik" (Log-likelihood, the default).