Fit a DFM to the data in levels of price indexes EUUS (CPI) in file CPIEurope2000 15 csv Apply the transformation ( log left(z t ight) ) and the command dfmpc to fit the model Analyze the properties of the first factor found Take the residuals from this factor and apply again the dfmpc command Comp...

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Fit a DFM to the data in levels of price indexes EUUS (CPI) in file CPIEurope2000-15.csv. Apply

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Fit a DFM to the data in levels of price indexes EUUS (CPI) in file CPIEurope2000-15.csv. Apply the transformation \(\log \left(z_{t}\right)\) and the command dfmpc to fit the model. Analyze the properties of the first factor found. Take the residuals from this factor and apply again the dfmpc command. Compare the results with those obtained in Exercise 5.

Data From Exercise 5:

Fit a DFM to the EUUS (CPI) price indexes in file CPIEurope2000-15.CSv. Apply the transformation \(abla abla_{12} \log z_{t}\) and the command dfmpc to fit the model.

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