Figure 10.15 contains ACF plots of 40 years of quarterly data, with all possible combinations of first-order seasonal and nonseasonal differencing. Which combination do you recommend in order to achieve stationarity?

Fig. 10.15. ACF plots of quarterly data with no differencing, nonseasonal differencing, seasonal differencing, and both seasonal and nonseasonal differencing.

Transcribed Image Text:

(a) none (b) nonseasonal (c) seasonal (d) both 42 e2 0 10 20 0 10 20 0 10 20 0 10 20 Lag Lag Lag Lag