1. FORECASTING THE LONG TERM AND
CHAPTER 12
FORECASTING THE LONG TERM AND
THE SHORT TERM JOINTLY
Figure 12.1 The Economist’s Reality
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

2. Figure 12.2 The Forecaster’s Reality
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3. Figure 12.3 Production Versus Consumption
González-Rivera: Forecasting for Economics and Business,
Copyright © 2013 Pearson Education, Inc.

4. Figure 12.4 Deviations from Equilibrium:
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

5. 12.1 Finding a Long-Term Equilibrium Relationship
Table Testing for Unit Root in Production and Consumption
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6. Table 12.1 Testing for Unit Root in Production and Consumption (continued)
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

7. Table 12.2 Critical Values to Test for Cointegration
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8. Table 12.3 Estimation of the Cointegrating Relation
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

9. Figure 12.5 Residuals of the Cointegrating Relation
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

10. Table 12.4 Testing the Stationarity of the Residuals
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

11. 12.2 Quantifying Short-Term Dynamics: Vector Error Correction Model
Figure Short-Term Dynamics
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

12. Table 12.5 Choice of Number of Lags in VEC
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13. Table 12.6 Estimation of VEC
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

14. 12.3 Constructing the Forecast
Table Multistep Forecast for Consumption and Production Growth Rates
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.

15. Figure 12.7 Multistep Forecast for Consumption and Production
González-Rivera: Forecasting for Economics and Business, Copyright © 2013 Pearson Education, Inc.