Germany’s GDP Data

Graphical Method to check the Stationarity of the series: -

1) Germany Series: -

2) Log of Germany Series: -

LNGERMANY
13.6

13.5

13.4

13.3

13.2

13.1
10 20 30 40 50 60 70 80 90 100 110

3) First Difference of LNGERMANY Series:-

 DLNGERMANY
.12

.08

.04

.00

-.04

-.08

-.12
10 20 30 40 50 60 70 80 90 100 110
From the above graphs we can see that the germany’s GDP data is not stationary
at the level and log of level, but the data is stationary at the first difference of the
log values of GDP data.
Correlogram of first difference is used find the AR and MA process.
As the ACF and PACF are significant for lag 1 only, so we must check ARMA levels for those ARIMA
(p,d,q) models:-(0,1,1), (1,1,0),(1,1,1)
1. ARMA Check at (0,1,1) levels

2. ARMA Check at (1,1,0) levels

 3. ARMA Check at (1,1,1) levels

Below table shows the result of different ARIMA model: -

The AIC value tells us the best fit model. So, we will continue with ARIMA(1,1,1)
for further predictions and analysis.
As ACF and PACF are not significant at any lag value, so we can say that the ARIMA(1,1,1) model is
best fit for predicting future values.

Now we look for coefficients of AR(1), MA(1) and Constant using Conditional Least Squares
Forecast using E-Views

Time Germany GDP Forecst

2018-Q4 742893.2 748018.5
2019-Q1 747441.4 750605.8
2019-Q2 743677.3 753197.1
2019-Q3 745977.6 755795
2019-Q4 745838.2 758401
2020-Q1 731688.2 761015.4
2020-Q2 660031.9 763638.7
2020-Q3 716004.6 766270.9