Question: Use the data in CPI_change_2.xlsx to generate forecasts for changes in the CPI by means of simple exponential smoothing (SES). a. Use the observed value

Use the data in CPI_change_2.xlsx to generate forecasts for changes in the CPI by means of simple exponential smoothing (SES). a. Use the observed value for 1963 as the starting value, and compute the one-step- ahead forecasts for subsequent years for = 0.2, 0.5, and 0.8 in turn. b. Compare the performance for the given values of by calculating the RMSE and MAE over the period 20012015

observation_date INFLATION
1/1/1963 1.21
1/1/1964 1.31
1/1/1965 1.67
1/1/1966 2.99
1/1/1967 2.78
1/1/1968 4.22
1/1/1969 5.41
1/1/1970 5.9
1/1/1971 4.26
1/1/1972 3.31
1/1/1973 6.22
1/1/1974 11.04
1/1/1975 9.13
1/1/1976 5.74
1/1/1977 6.49
1/1/1978 7.65
1/1/1979 11.27
1/1/1980 13.51
1/1/1981 10.32
1/1/1982 6.16
1/1/1983 3.21
1/1/1984 4.32
1/1/1985 3.56
1/1/1986 1.86
1/1/1987 3.74
1/1/1988 4.01
1/1/1989 4.83
1/1/1990 5.4
1/1/1991 4.23
1/1/1992 3.03
1/1/1993 2.95
1/1/1994 2.61
1/1/1995 2.81
1/1/1996 2.93
1/1/1997 2.34
1/1/1998 1.55
1/1/1999 2.19
1/1/2000 3.38
1/1/2001 2.83
1/1/2002 1.59
1/1/2003 2.27
1/1/2004 2.68
1/1/2005 3.39
1/1/2006 3.23
1/1/2007 2.85
1/1/2008 3.84
1/1/2009 -0.36
1/1/2010 1.64
1/1/2011 3.16
1/1/2012 2.07
1/1/2013 1.46
1/1/2014 1.62
1/1/2015 0.12

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!