1. Plot the value of inflt for 1963:Q1 to 2013:Q4. Does the inflt series look stationary (substantiate your answer)? 2. Compute the change in the inflation rate inflt and plot the value of inflt for 1963:Q2 to 2013:Q4. Does the inlt series look stationary (substantiate your answer)? 3. Compute and plot the first eight autocorrelations of the inflt series. Do these autocorrelations suggest that inflt is stationary (why?/why not?) 4. Estimate an AR(1)-model for inflt using the 1m()-command; that is, run an OLS regression of inlt on inflt1 using the 1m()-command. Report the estimated regression. Does knowing the change in inflation over the current quarter help predict the change in inflation over the next quarter? Substantiate your answer. Hint l: Consult slides from lecture 7 . Hint II: Compute robust standard errors. 5. Estimate an AR(2)-model for inflt using the 1m()-command.; that is, run an OLS regression of inflt on inflt1 and inflt2 using the 1m()-command. Report the estimated regression. Does inflt2 help predict the change in inflation over the next quarter? Substantiate your answer. Hint l : Consult slides from lecture 7 . Hint II: Compute robust standard errors. 6. Estimate an AR(3)-model for inflt using the 1m()-command.; that is, run an OLS regression of inflt on inflt1,inflt2, and inflt3 using the 1m()-command. Report the estimated regression. Does inft3 help predict the change in inflation over the next quarter? Substantiate your answer. Hint l : Consult slides from lecture 7 . Hint II: Compute robust standard errors. 7. Use the AR(2)-model from question 5 to (1-step ahead) forecast the change in inflation in 2014:Q1. Report your forecast. Hint l: Consult slides from lecture 7 . 8. Make a 1-step ahead forecast of the inflation rate in 2014:Q1. Report your forecast. Hint l: You are asked to forecast in fl l2014:Q1 ! 1. Plot the value of inflt for 1963:Q1 to 2013:Q4. Does the inflt series look stationary (substantiate your answer)? 2. Compute the change in the inflation rate inflt and plot the value of inflt for 1963:Q2 to 2013:Q4. Does the inlt series look stationary (substantiate your answer)? 3. Compute and plot the first eight autocorrelations of the inflt series. Do these autocorrelations suggest that inflt is stationary (why?/why not?) 4. Estimate an AR(1)-model for inflt using the 1m()-command; that is, run an OLS regression of inlt on inflt1 using the 1m()-command. Report the estimated regression. Does knowing the change in inflation over the current quarter help predict the change in inflation over the next quarter? Substantiate your answer. Hint l: Consult slides from lecture 7 . Hint II: Compute robust standard errors. 5. Estimate an AR(2)-model for inflt using the 1m()-command.; that is, run an OLS regression of inflt on inflt1 and inflt2 using the 1m()-command. Report the estimated regression. Does inflt2 help predict the change in inflation over the next quarter? Substantiate your answer. Hint l : Consult slides from lecture 7 . Hint II: Compute robust standard errors. 6. Estimate an AR(3)-model for inflt using the 1m()-command.; that is, run an OLS regression of inflt on inflt1,inflt2, and inflt3 using the 1m()-command. Report the estimated regression. Does inft3 help predict the change in inflation over the next quarter? Substantiate your answer. Hint l : Consult slides from lecture 7 . Hint II: Compute robust standard errors. 7. Use the AR(2)-model from question 5 to (1-step ahead) forecast the change in inflation in 2014:Q1. Report your forecast. Hint l: Consult slides from lecture 7 . 8. Make a 1-step ahead forecast of the inflation rate in 2014:Q1. Report your forecast. Hint l: You are asked to forecast in fl l2014:Q1