13.57 Moving averages and linear trend.
The moving-average model provides reasonable predictions only under certain scenarios. Consider monthly seasonally adjusted Consumer Price Index (CPI) data, starting with January 1990 and ending in July 2014.32
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(a) The CPI series is steadily increasing over time. (c) The plot gets smoother with a larger span. (d) The results are consistent with the quote. Both moving average predictions would grossly underestimate the CPI values. However, they do show the general pattern, or upward trend, of the CPI data.