Consider the following distributed lag model relating the percentage growth in private investment (INVGWTH) to the feder

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answerhappygod
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Consider the following distributed lag model relating the percentage growth in private investment (INVGWTH) to the feder

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Consider the following distributed lag model relating thepercentage growth in private investment (INVGWTH) to the federalfunds rate on interest (FFRATE):
INVGWTH t = 4 - 0.4FFRATE t - 0.8 FFRATE t-1 - 0.6 FFRATE t-2 - 0.2 FFRATEt-3
a. Suppose FFRATE =1 % FOR t=1,2,3,4. Use the above equation to forecast INVGWTH for t =4
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