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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
College Algebra
1st Edition
ISBN:9781938168383
Author:Jay Abramson
Publisher:Jay Abramson
Chapter6: Exponential And Logarithmic Functions
Section6.8: Fitting Exponential Models To Data
Problem 3TI: Table 6 shows the population, in thousands, of harbor seals in the Wadden Sea over the years 1997 to...
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 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. 

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