Question 13.75

13.75 Exponential smoothing for unemployment rate.

Consider the annual unemployment rate time series from Exercise 13.38 (page 690).

unempl

  1. Use statistical software to determine the optimal smoothing constant . Does this optimal fall in the traditional range for ? Explain.
  2. The series ended with the 2013 unemployment rate. Based on the reported optimal , calculate the forecasts for 2014 unemployment rate.

13.75

(a) . No, Normally should be between 0 and 1. (b) 7.3057.