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Wilkie Model

C

claura07

Member
What exactly is required of us with regards to the wilkie model..? Are we expected to cram the updating formulae as well as the varma representation? What kind of questions can be asked considering that the notes are ambiguous and most of it is additional reading..?
 
When in doubt like this, it's worth checking what the Syllabus objectives are [see (vii)2,4] and what's been asked in the past. Please can you let us know what's ambiguous so we can consider possible changes when we next update the course?

I would say it's a good idea to know:
1. the rationale behind the Wilkie model and its key features
2. the Inflation updating equation
3. a list of characteristics that might or might not be present in updating equations
4. how to perform simple calculations, eg 95%CI for inflation in one year
5. significance of cross-sectional/longitudinal properties
6. the point of the VARMA representation

You could learn the other updating equations if you have time, but you've never (so far) been required to state any Wilkie equations in past exam questions - any equations have been given. You might have to comment on their economic plausibility so be prepared to do this, noting that the equations might be ones you haven't seen before, since the Wilkie model is a case study, rather than a complete set of equations.
 
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