Homework Help is Here – Start Your Trial Now!
Math
Statistics
FIGURE 14.2 Four Economic Time Serles Percent Dollars per pound 11r 1아 3.0r 2.5 2.아 1.5- 1.0 0.5 - 0.0L 1960 1970 1980 1990 2000 2010 2012 1960 1970 1980 1990 2000 2010 2012 (a) U.S. Unemployment Rate (b) U.S. Dollar/British Pound Exchange Rate Percent per day Logarithm 12.5 5.0r 10.0 7.5 4.5- 5.0 2.5 4.0- 0.0 3.5- -2.5 -5.0 3.0- -7.5 25 1960 1970 1980 1990 2000 2010 2012 -10.0 1990 1994 1998 2002 2006 2010 (c) Logarithm of Index of Industrial Production in Japan (d) Percentage Change in Daily Values of the Wilshire 5000 Stock Price Index The four time series have markedly different patterns. The unemployment rate (Figure 14.2a) increases during recessions and declines during recoveries and expansions. The exchange rate between the U.S. dollar and the British pound (Figure 14.2b) shows a discrete change after the 1972 collapse of the Bretton Woods system of fixed exchange rates. The logarithm of the index of industrial production in Japan (Figure 14.2c) shows a pat- tern of decreasing growth. The daily percentage changes in the Wilshire 5000 stock price index (Figure 14.2d) are essentially unpredictable, but the variance changes: This series shows "volatility clustering."

FIGURE 14.2 Four Economic Time Serles Percent Dollars per pound 11r 1아 3.0r 2.5 2.아 1.5- 1.0 0.5 - 0.0L 1960 1970 1980 1990 2000 2010 2012 1960 1970 1980 1990 2000 2010 2012 (a) U.S. Unemployment Rate (b) U.S. Dollar/British Pound Exchange Rate Percent per day Logarithm 12.5 5.0r 10.0 7.5 4.5- 5.0 2.5 4.0- 0.0 3.5- -2.5 -5.0 3.0- -7.5 25 1960 1970 1980 1990 2000 2010 2012 -10.0 1990 1994 1998 2002 2006 2010 (c) Logarithm of Index of Industrial Production in Japan (d) Percentage Change in Daily Values of the Wilshire 5000 Stock Price Index The four time series have markedly different patterns. The unemployment rate (Figure 14.2a) increases during recessions and declines during recoveries and expansions. The exchange rate between the U.S. dollar and the British pound (Figure 14.2b) shows a discrete change after the 1972 collapse of the Bretton Woods system of fixed exchange rates. The logarithm of the index of industrial production in Japan (Figure 14.2c) shows a pat- tern of decreasing growth. The daily percentage changes in the Wilshire 5000 stock price index (Figure 14.2d) are essentially unpredictable, but the variance changes: This series shows "volatility clustering."

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
See similar textbooks
icon
Related questions
Question

Look at the four plots in Figure 14.2—the US unemployment rate, the
dollar-pound exchange rate, the logarithm of the index of industrial production, and the percentage change in stock prices. Which of these series
appears to be non-stationary? Which of them appears to resemble a random
walk?

FIGURE 14.2 Four Economic Time Serles Percent Dollars per pound 11r 1아 3.0r 2.5 2.아 1.5- 1.0 0.5 - 0.0L 1960 1970 1980 1990 2000 2010 2012 1960 1970 1980 1990 2000 2010 2012 (a) U.S. Unemployment Rate (b) U.S. Dollar/British Pound Exchange Rate Percent per day Logarithm 12.5 5.0r 10.0 7.5 4.5- 5.0 2.5 4.0- 0.0 3.5- -2.5 -5.0 3.0- -7.5 25 1960 1970 1980 1990 2000 2010 2012 -10.0 1990 1994 1998 2002 2006 2010 (c) Logarithm of Index of Industrial Production in Japan (d) Percentage Change in Daily Values of the Wilshire 5000 Stock Price Index The four time series have markedly different patterns. The unemployment rate (Figure 14.2a) increases during recessions and declines during recoveries and expansions. The exchange rate between the U.S. dollar and the British pound (Figure 14.2b) shows a discrete change after the 1972 collapse of the Bretton Woods system of fixed exchange rates. The logarithm of the index of industrial production in Japan (Figure 14.2c) shows a pat- tern of decreasing growth. The daily percentage changes in the Wilshire 5000 stock price index (Figure 14.2d) are essentially unpredictable, but the variance changes: This series shows "volatility clustering."
Transcribed Image Text:FIGURE 14.2 Four Economic Time Serles Percent Dollars per pound 11r 1아 3.0r 2.5 2.아 1.5- 1.0 0.5 - 0.0L 1960 1970 1980 1990 2000 2010 2012 1960 1970 1980 1990 2000 2010 2012 (a) U.S. Unemployment Rate (b) U.S. Dollar/British Pound Exchange Rate Percent per day Logarithm 12.5 5.0r 10.0 7.5 4.5- 5.0 2.5 4.0- 0.0 3.5- -2.5 -5.0 3.0- -7.5 25 1960 1970 1980 1990 2000 2010 2012 -10.0 1990 1994 1998 2002 2006 2010 (c) Logarithm of Index of Industrial Production in Japan (d) Percentage Change in Daily Values of the Wilshire 5000 Stock Price Index The four time series have markedly different patterns. The unemployment rate (Figure 14.2a) increases during recessions and declines during recoveries and expansions. The exchange rate between the U.S. dollar and the British pound (Figure 14.2b) shows a discrete change after the 1972 collapse of the Bretton Woods system of fixed exchange rates. The logarithm of the index of industrial production in Japan (Figure 14.2c) shows a pat- tern of decreasing growth. The daily percentage changes in the Wilshire 5000 stock price index (Figure 14.2d) are essentially unpredictable, but the variance changes: This series shows "volatility clustering."
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Time Series Analyses, Forecasting Methods, and Indices
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman
SEE MORE TEXTBOOKS