Refer to Exercise 20.26. Forecast next year’s merchandise trade balance using the following methods.
a. Autoregressive forecasting model.
b. Exponential smoothing method with w = .7.

In exercise 20.26

Foreign trade is important to the United States. No country exports and imports more. However, there has been a large trade imbalance in many sectors. To measure the extent of the problem, an economist recorded the difference between exports and imports of merchandise (excluding military) for the years 1980 to 2012.