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What potential limitations or weaknesses are associated with using the Box – Jenkins Methodology for time series modelling?
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- How does it reconcile cross-sectional data with that from time series macroeconomic dataHow Regression models are used for Forecasting purpose?Foreign exchange forecasting can be either long-term, or short-term in duration. Compare and contrast the motivation for and the techniques a forecaster might use for each of the time periods.
- PLEASE PROVIDE ME A COMPLETE, COMPREHENSIVE, CORRECT, AND EXPERT ANSWER ASAP FOR MY FUTURE REFERENCE THANK YOUUUThe following table represents sales data for milk (in hundred liters) sold by a grocery.Do the computations to fill out the table and answer the following questions:1. Using MAD as the criterion, which of the following models would you use for thegiven time series data? Why?A. Naïve approach;B. 5-month SMA model;C. WMA model with weights 0.1, 0.3, and 0.6; orD. ES model with α = 0.5 and a forecast of 3,500 liters in the first month. NOTE: In answering Item 1, mention the whole description of the model; i.e., not just“SMA model”, but “SMA model with n = ...”; not just “WMA model”, but “WMA modelwith weights ...”; not just “ES model”, but “ES model with α = ...”. 2. Interpret the MAD of the most accurate among the forecasting models above.3. Based on your decision in Item 1, what should be the forecast for Month 11?What is a probit model vrs. a logit model?
- Economic time series are maintained and published by some government agencies such as the Census Bureau and the Bureau of Labor Statistics, and they use time series decomposition. Why do you think they use time series decomposition? Explain in detail.List four main reasons and explain why empirical research often involves taking natural logarithmic transformation for time series analysis?Explain why in every econometric model there must be an error term, explain its function.
- Explain why it is important that time-series variables are ‘stationary’. Outline a method that can be used to transform a non-stationary series into a stationary one.Define Nonstationarity? Explain the two most important types of nonstationarity in economic time series data?T. Haavelmo devised a model of the US economy for the years 1929–1941 based on the followingequations:(i) c = 0.712y + 95.05 (ii) s = 0.158(c + x) − 34.30(iii) y = c + x − s (iv) x = 93.53Here x denotes total investment, y is disposable income, s is the total saving by firms, and c istotal consumption. Write the system of equations in the form (1) when the variables appear inthe order x, y, s, and c. Then find the solution of the system.