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Derive 1-step and 2-step ahead

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Reference no: EM133125214

(i) How would you test whether inclusion of house price growth lead to an improvement in the forecast of the bivariate model of industrial production growth and SLO?

(ii) Should we keep on including more variables in the VAR system?

(iii) Derive 1-step and 2-step ahead forecasts from a 2-variable VAR system.

Reference no: EM133125214

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