Time-series: Auto-correlation, stationarity, and structural breaks methods

1. Briefly explain the results for "Table 3 inflation"(1st image) and explain the test (2nd image)? (dinf= change in inflation, unemp= unemployment)

2. Which of the four models are most appropriate?

3. Is the forecast valid?

4. What are your conclusions?

Table 3: Inflation (Estimating AR and ADL models: L dint 1962ql 2004q4 Modell, dinf L(1/4) dint 1962q1 2004q4 Mode12, indf L(1/4) dint L(1/4) uneme, 1962q1 2004q4 Mode13. Estimating ADI models with structural break for unemployment on 198/q4 Model 4 (1) (2) (3) (4) Modell Mode12 Mode13 Mode14 VARIABLES dinf dinf dinf dinf L.dinf 0.238*#* 0.258** * 0.420** * -0.472*** (0.0747) (0.0774) (0.0789) (0.0792) L2.dinf -0.32)* * * -0.367*** -0.413* * * (0.0791) (0.0856) (0.0865) L3.dinf 0.158* * 0.0566 0.0260 (0.0793) (0.0830) (0.0830) L4.dinf -0.0303 -0.0365 -0.0271 (0.0779) (0.0746) (0.0740) L.unemp 2.636** * -2.706** * (0.451) (0.580) L2.unemp 3.043** * 3.372*** (0.874) (1.156) L3.unemp -0.377 -1.857 (0.894) (1.162) L4.unemp -0.248 0.922 (0.477) (0.604) 18 1 -0.593 (0.927) ds1_unempl -0.473 (0.892) 181 unemp2 -0.267 (1.645) d$1_unemp3 3.673* * (1.630) 181_unemp4 -2.863* ** (0.880) Constant 0.0171 0.0224 1.304* ** 1.697* * (0.127) (0.118) (0.492) (0.703) Observations 172 172 172 172 R-squared 0.056 0.204 0.366 0.419 Standard errors in parentheses *** p