Consider the three DLMs below, each with a 2 dimensional state vector t = ( t1 t2). Each model is de ned by the constant FG elements shown. For each of these DLMs, give details of the implied form of the forecast function ft(k) over k =12 and comment on the meaning/interpretation of the elements of the state vector.

(a) The rst DLM has F= 1 0 and G= 1 09 0 09

(b) The second DLM has F= 1 1 and G= 095 0 0

(c) The third DLM has 080 F= 1 1 and G= 1 0 0 0