Homework assignment 3
Course: Introductory Econometrics
Lecturer: Dmytro Vikhrov
Due date: December 2, 2014 (in class or by email).
Instructions. Before starting the assignment, you are advised to read chapters 21
and 22.1–22.7 from Gujarati’s book (Basic Econometrics) on pages 792–848. You are
required to understand the general picture of time series modelling, but not technical
derivations. You can work in groups, but students must submit their own answers.
Use Table 21.1.gdt from Gujarati tab for this assignment. Consider only PDI and
PROFITS variables. Following the steps outlined in class, setup two ARIMA(p, d, q)
models and perform one step ahead forecasts.