Adaptive Expectations Forecast
Not sure if this is the correct forum (it was here or 'other topics'), but here goes:
1) Calculate the adaptive forecasts:
(y^e)t, t+1 = .63*(y)t + (1-.63)*(y^e)t-1, t
For time periods 1-100, assuming an initial value of (y^e)0,1 = 0.
Some syntax clarification: (y^e)t, t+1 just means the expected value of y at time t+1.
I really have no idea how to approach this problem, the professor covered this topic in all of about 5 minutes and gave us this homework sheet. Any help would be GREATLY appreciated!