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Time Series And Spectral Methods In Econometrics by C.W.J.Granger
Time Series And Spectral Methods In Econometrics by C.W.J.Granger
Publisher Summary
This chapter discusses two alternative approaches to the analysis of economic data, which is time series and the classical econometric approaches. The time series approach is based on experience from many fields, but that of the econometrician has been viewed as applicable only to economic data that have displayed a great deal of simultaneous or contemporaneous interrelationships. Some influences from the time series domain penetrated that of the classical econometrician, such as how to deal with trends and seasonal components, Durbin–Watson statistics, and first-order serial correlation, but there was little influence in the other direction. In the past 10 years, this state of affairs has changed dramatically, with time series ideas becoming more mainstream and the procedures developed by econometricians being considered more carefully by the time series analysts. The building of large-scale models, worries about efficient estimation, the growing popularity of rational expectations theory and the consequent interest in optimum forecasts, and the discussion of causality testing have greatly helped in bringing the two approaches together, with benefits to both sides. The chapter briefly discusses the question of differencing of data, as an illustration of the alternative approaches taken in the past. It also discusses some applications of time series methods to economic data.
What is forex?
Quite simply, it’s the global market that allows one to trade two currencies against each other.
If you think one currency will be stronger versus the other, and you end up correct, then you can make a profit.
If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.
Foreign Exchange
You go up to the counter and notice a screen displaying different exchange rates for different currencies.
An exchange rate is the relative price of two currencies from two different countries.
You find “Japanese yen” and think to yourself, “WOW! My one dollar is worth 100 yen?! And I have ten dollars! I’m going to be rich!!!”
When you do this, you’ve essentially participated in the forex market!
You’ve exchanged one currency for another.
Or in forex trading terms, assuming you’re an American visiting Japan, you’ve sold dollars and bought yen.
Currency Exchange
Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over (Tokyo is expensive!) and notice the exchange rates have changed.
It’s these changes in the exchange rates that allow you to make money in the foreign exchange market.
Salepage : Time Series And Spectral Methods In Econometrics by C.W.J.Granger
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