Stationary or invertible variable
Let et~ WN(0,2). State for each of the following model whether it is stationary and whether it is invertible. Explain your answer.
a) Zt= 1+ 0.5Zt-1 + et, t=1,2.3....
b) Zt= et - 1.5et-1 + 0.5et-2, t=1,2,3,
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Let et~WN. Consider two time series models: Model A: (1+1.3B+0.65B*2(raised to the second power) + 0.325B*3 + 1.625B*4 + 0.05B*5)Y t= et Model B: (1+0.8B)Y t= (1-0.5b)et. a) Find the 'greek letter psy' - weights for the two models.
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