Learn about binary regressions in an example.
- [Instructor] Ed's boss has asked him…to help the firm understand…what drives changes in interest rates.…In particular, because Ed works for a real estate company,…one of the primary interest rates…that they're concerned about, is the Federal Reserve rate.…Ed wants to understand what factors…drive the Federal Reserve rate…so that he can apply that understanding…to projects the company is working on.…I'm in the 03_03_Begin file…from the Exercise Files folder.…
Ed's gathered data using FRED,…the Federal Reserve Economic Database,…on the Federal Reserve rate,…inflation,…industrial production numbers,…and on employment figures.…In particular, he's gathered this data on a monthly basis…from 1960 through present.…Let's go ahead and clean up the data a little bit…just to help make it more understandable for us.…So this first two columns, A and B,…is the effective federal funds rate,…and value is the value for that.…
I'm going to relabel this column,…Fed Funds Rate.…These next two columns, C and D,…are the changes in the consumer price index on a core level.…
Professor Michael McDonald demonstrates how to harness the wealth of information available on the Internet to forecast statistics such as industry growth, GDP, and unemployment rates, as well as factors that directly affect your business, like property prices and future interest rate hikes. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. He also covers time series exponential smoothing, fixed effects regression, and difference estimators. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
- Understanding big data and economic forecasting
- Predicting values with regressions
- Analyzing economic trends and economic cycles
- Using fixed-effects regressions and binary regressions for forecasting
- Assessing the accuracy of an economic forecast
- Using scenario analysis