University of California Economics Discussion

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Answer this question: Is ARMA better than just AR or MA?There is no wrong answer. Answer around 100 words.And I will give you two other classmates’ answers later. Need to reply each one of them.

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Personally, the ARMA or just AR or MA depends on the users that which model perfectly suffices their needs. If the chances of error rate are
less in any one model compared to other models then it’s preferred that we choose the one which gives us the closest estimation. So I don’t
think there are a best one for all circumstances.
AR, MA, ARMA and ARIMA models are used to predict observations at (t+1) based on historical data from previous points in time recorded for the same observation. ARMA
model combines AR model and MA model. All of these models provide us with insight or at least close enough predictions for any particular time series. In addition, it
depends on which model best meets their needs. If any model has a smaller chance of error rate than the others, we are better off choosing the model that provides the
closest estimate.

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Explanation & Answer:
100 Words

Tags:
economics

AR

ARMA

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