1. What is the difference between autoregressive and distributed-lag models?You should provide an example and use equations to illustrate your answer. (5 marks)
2. Provide a full explanation of the Partial Adjustment Model (PAM) and show how it can be transformed into a First-Order Autoregressive process (AR(1)).You should use equations to illustrate your answer.
3. Given the following distributed-lag model:

Yt=0.4+5.5Xt+4.6Xt-1+2.4Xt-2+1.05Xt-3+0.1Xt-4+ut

Calculate:

1. The short-term impact
2. The long-run impact
3. The mean-lag

4)What problems might one encounter in the estimation of distributed-lag models? (7 marks)

5)Show analytically that the Koyck model residuals present first-order autocorrelation. (6 marks)