Suppose the following model describes changes in the civilian unemployment rate: Δuert = −0.0405 − 0.4674Δuert −1. The current change (first difference) in the un- employment rate is 0.0300. assume that the mean-reverting level for changes in the unemployment rate is −0.0276. a. what is the best prediction of the next change? b. what is the prediction of the change following the next change? C. explain your answer to Part b in terms of equilibrium.

Suppose the following model describes changes in the civilian unemployment rate: Δuert = −0.0405 − 0.4674Δuert −1. The current change (first difference) in the un- employment rate is 0.0300. assume that the mean-reverting level for changes in the unemployment rate is −0.0276. a. what is the best prediction of the next change? b. what is the prediction of the change following the next change? C. explain your answer to Part b in terms of equilibrium.

College Algebra

1st Edition

ISBN:9781938168383

Author:Jay Abramson

Publisher:Jay Abramson

Chapter4: Linear Functions

Section4.3: Fitting Linear Models To Data

Problem 24SE: Table 6 shows the year and the number ofpeople unemployed in a particular city for several years....

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