Hi, can someone please help me with my doubt. in the literature i have come across the following facts with markov model we can build recombining tree which non markov model we usually need non-recombining tree. i am having why markov => recombining tree and non markov => non recombining tree. this may be a stupid question but any help is greatly appreciated. thanks in advance.

if the tree is recombining for each node there is more than one path to get to it from the initial node. Therefore the model state must only depend on the coordinates of the node.If the tree is non-recombining, each node has only one path to get to it, so the model state can depend on the entire history.Clearer?

Hi babu12 and ehremo,I was having the same trouble yesterday, trying to understand or to figure out a relation markovian, recombining trees. I think (but i am not sure, maybe someone can help me understand better) that the following holds:1. Recombining trees are Markov processes: Supposing that we have fixed the probabilities of an up- or down-jump, then using Donsker's(?) Theorem, one can prove that a recombining binomial lattice leads to a Markov process.2. The other way around, Markov processes do not necessarily need to be represented via recombining trees: As mentioned before, the entire term structure can be reconstructed via just 2 state variables, i.e., in each step of the Markov process, the model state only depends on the coordinates of the node. E.g., if today does not depend on the history before yesterday, also tomorrow will not depend on the one before today and so forth, which would actually lead us to conclude, that there must exist at least one path from the source node to each inquiry point, and thus, mislead us to believe, that these must be recombinig, and this is not at all the case. 3. However, non-Markovian process are represented via non-recombining trees.I am not 100% sure about the above considerations, and I hope that maybe you can help me figure this out!Thanks in advance!