Economics Homework Help

Consumption: Consumer expenditure consumption in the UK

Required:

1. Construct a univariate time-series model using the consumption variable. Recall that

there are three stages involved in this process: Identification, estimation and diagnostic

test. You should cover all these aspects until you reach your final model.

2. Forecast and test the forecasting accuracy of your model. Use as a forecasting sample

for the period between 2007M01 to 2011M05.What can you conclude about this?