6. We ran a Vector-autoregresive model with five variables: with dtrade (change in trade balance), drex (change in real exchange rate), diipuk (change in Index of UK Industrial production), diipus ((change in Index of US Industrial production) and doilpr (change in Index of Oil price Index) and the result for lag length selection is as follows: Lag 1 2 3 Log-Likelihood 4397.98 4547.56 4591.56 4610.42 4630.33 p-values for Log-Likelihood Ratio Test 0 0 0.049 0.03 AIC -21.2735 -21.8768 -21.9688 -21.6308 -21.5098 SBC -21.2248 -21.5845 -21.433 -21.1597 -20.8915 Which model should you choose based on different criteria and why?

College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter4: Linear Functions
Section: Chapter Questions
Problem 8PT: Does Table 1 represent a linear function? If so, finda linear equation that models the data.
Question
6. We ran a Vector-autoregresive model with five variables: with dtrade (change in trade
balance), drex (change in real exchange rate), diipuk (change in Index of UK Industrial
production), diipus ((change in Index of US Industrial production) and doilpr (change in
Index of Oil price Index) and the result for lag length selection is as follows:
Lag
0
2
3
p-values for
4397.98
4547.56
4591.56
4610.42
4630.33
Log-Likelihood
Log-Likelihood Ratio Test
0
0
0.049
0.03
AIC
-21.2735
-21.8768
-21.9688
-21.6308
-21.5098
SBC
-21.2248
-21.5845
-21.433
-21.1597
-20.8915
Which model should you choose based on different criteria and why?
Transcribed Image Text:6. We ran a Vector-autoregresive model with five variables: with dtrade (change in trade balance), drex (change in real exchange rate), diipuk (change in Index of UK Industrial production), diipus ((change in Index of US Industrial production) and doilpr (change in Index of Oil price Index) and the result for lag length selection is as follows: Lag 0 2 3 p-values for 4397.98 4547.56 4591.56 4610.42 4630.33 Log-Likelihood Log-Likelihood Ratio Test 0 0 0.049 0.03 AIC -21.2735 -21.8768 -21.9688 -21.6308 -21.5098 SBC -21.2248 -21.5845 -21.433 -21.1597 -20.8915 Which model should you choose based on different criteria and why?
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We ran a Vector-autoregresive model with five variables: with dtrade (change in trade balance), drex (change in real exchange rate), diipuk (change in Index of UK Industrial production), diipus ((change in Index of US Industrial production) and doilpr (change in Index of Oil price Index) and the result for lag length selection is as follows:

LagLog-Likelihoodp-values for Log-likelihood Ratio TestAICSBC
04397.98
-21.2735-21.2248
14547.560-21.8768-21.5845
24591.560-21.9688-21.433
34610.420.049-21.6308-21.1597
44630.330.03-21.5098-20.8915


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