Linear and log linear trend in data

Assignment Help Macroeconomics

Reference no: EM1313223

The following table shows gasoline sales in the United States (in millions of barrels) from the first quarter of 1986 to the last quarter of 1989.

GASOLINE SALES IN THE UNITED STATES: 1986:1 TO 1989:4 (IN MILLIONS OF BARRELS)
1986.1	600.4	1987.1	610.8	1988.1	640.8	1989.1	639.3
1986.2	652.8	1987.2	679.5	1988.2	686.5	1989.2	681.0
1986.3	671.1	1987.3	681.2	1988.3	691.1	1989.3	685.5
1986.4	654.8	1987.4	667.6	1988.4	676.5	1989.4	677.7

a. Estimate the linear trend in the data, and use it to forecast gasoline sales in the United States in each quarter of 1990.

b. Estimate the log-linear trend in the data, and use it to forecast gasoline sales in the United States in each quarter of 1990.

c. Which form of the trend fits the historical data better? Why would we expect both forecasts to be rather poo

Reference no: EM1313223

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