Econ 504 2 The FRED data site and forecasting environments questions

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I just need the answer for question 2 and question 3 in attached file.

(The FRED data required in question#2 is from https://fred.stlouisfed.org.)

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Econ 504 Spring 2019 HW 2 Due to Shi by 9:30 a.m. on February 11 1. a. Consider part (i) of Problem 1 of HW 1. Now use R to obtain the first three sample autocorrelations. Mark them on your R output. Are these the same numbers you got in your Excel spreadsheet in the answer to part (i) of Problem 1 in HW 1? b. Based on the data in this part, is the variable considered here white noise? Conduct both individual tests on the first thee autocorrelations and also a joint test for the three. In each case clearly specify your null hypothesis, alternative hypothesis, and your rejection criterion - explaining the conclusion of your test. Use R for your answer. 2. From the FRED data site download data on U.S. civilian unemployment rate (monthly, seasonally adjusted) in Excel for the entire period for which the data are available. a. How is the civilian unemployment rate defined? What is the source of the FRED data? Check out there (i.e., at the source) at what dates the corresponding monthly unemployment rates for the months of February, March, April, and May of 2019 will be released. b. What were the civilian unemployment rates in November and December of 2018? c. Plot the series in R. What was the highest unemployment rate in the series and when (what month and year) did it happen? When was the unemployment rate at its lowest and what was the rate? d. Consider the same monthly unemployment data but for years 2001 through 2018 only. Generate the correlogram of the data in R. Comment on the characteristics of the correlogram, if any. 3. Consider the following forecasting environments. In each case describe the nature of losses from forecast errors. Do you think the loss function is approximately symmetric? a. Suppose you are a weather forecaster at a TV station for your city. You forecast the probability of rain the following day among other things. You know that people hate to be caught up in rain unprepared. You also know that they feel less irritated than in the former situation if they carried an umbrella based on the day’s forecast but the rain never materialized. And, of course, you do care how your viewers feel about your forecasts, because your job and salary depend on viewers’ ratings. Page 1 of 2 b. Your forecast project involves projecting water flows in a river in order to determine the height of the dam that is going to be built. c. A person is trying to project his post retirement expenses. Based on that he will determine how much money from his current earnings he will have to set aside. 4. Slide # 17 of lecture note 6_MA processes claims that the two processes on the slide have the same ACF. Derive the ACFs of the two processes. Are the ACFs the same? Page 2 of 2 ...
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Prof_Parker
School: UIUC

Attached.

2. From the FRED data site download data on U.S. civilian unemployment rate (monthly, seasonally
adjusted) in Excel for the entire period for which the data are available.
a. How is the civilian unemployment rate defined? What is the source of the FRED data? Check out there
(i.e., at the source) at what dates the corresponding monthly unemployment rates for the months of
February, March, April, and May of 2019 will be released.
The unemployment rate is defined as the number of unemployed persons as a percentage of the labor
force who live in the United States.

The source of the data is the U.S. Bureau of Labor Statistics
The Employment Situation for February, March, April, and May of 2019 is scheduled to be released as
follows:

February 2019 Mar. 08, 2019 08:30 AM
March 2019

Apr. 05, 2019

08:30 AM

April 2019

May 03, 2019

08:30 AM

May 2019

Jun. 07, 2019

08:30 AM

b. What were the civilian unemployment rates in November and December of 2018?
The civilian unemployment rates in November 2018 was 3.7 whereas in December, the civilian
unemployment rate rose to 3.9.

6
4

UNRATE

8

10

c. Plot the series in R. What was the highest unemployment rate in the series and when (what month
and year) did it happen? When was the unemployment rate at its lowest and what was the rate?

1980

2000

2020

DATE

The highest unemployment rate was 10.8, recorded in November and December 1982. The lowest
unemployment rate was 2.5, recorded in May and June 1953.
d. Consider the sa...

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