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It's time to begin forecasting. Start by identifying reasonable training and validation periods for industrial production. Explain your reasoning. That is, why is say, an
It's time to begin forecasting. Start by identifying reasonable training and validation periods for industrial production. Explain your reasoning. That is, why is say, an X-month training period sufficient for this variable? If you have yet to do so, install the "forecast" package for R. For the British industrial production data in logs, write an R script that will: replicate Figure 3.2 from your text with a 5-year validation period; create a naive forecast for log British industrial production, chart the forecast errors (i.e. replicate Figure 3.3), and calculate the MAE, RMSE, and MAPE; and construct a quadratic trend forecast for log British industrial production, chart the forecast errors, and calculate the MAE, RMSE, and MAPE. Comment on your results. As you have no doubt seen, the text reproduces the scripts used to produce the example applications; all you need to do is modify this as needed. Submit your script file, charts, and a table of diagnostic statistics using the tool below. it is an excel file named IPIUK.xlsx colunm 1 with name Date and column 2 with name Industrial production Index
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