For Exercises 13.38 and 13.39, see page 690.

Question 13.38

13.38 Unemployment rate.

The Bureau of Labor Statistics tracks national unemployment rates on a monthly and annual basis. Use statistical software to analyze annual unemployment rates from 1947 through 2013.23

  1. Make a time plot of the unemployment rate time series.
  2. How would you best describe the time behavior of the series?
  3. Create a lag one variable of unemployment and plot employment versus its lag. Does the plot suggest the use of the lag variable as a possible predictor variable? Explain.
  4. If your software has the option, obtain a PACF for the unemployment series. What does the PACF suggest as a possible model to fit to the data?

unempl