Answered step by step
Verified Expert Solution
Question
1 Approved Answer
For this question I do not want you to perform any actual model estimation. I want you to consider setting up a system of equations
For this question I do not want you to perform any actual model estimation. I want you to consider setting up a system of equations you would estimate to forecast the target variable. In addition to your equations you should explain why you adopted the structure you did. This includes the variables in the equations and any lag lengths. In particular you need to pay attention to situations like the inclusion of forecasted values of one variable in the equation for another variable. Construct a forecast model for aggregate savings in the US economy. The model must include: disposable income, a measure of interest rates inflation, and at least one other variable of your choice. Detail the relationships as you would model them in a forecast paying attention to the sequence of estimation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started