Thursday, July 26, 2018

Rental vacancy data versus forecast

I put together a dynamic information equilibrium model of rental vacancy rates over a year ago (you can think of it as an "unemployment rate" for rental housing). I haven't updated it in awhile, so here's the latest post-forecast data (black):

Although it is within error, this does show a bit of the "overshooting" that happens when you estimate the shock parameters for an incomplete shock (I talk about it here, another example is here). Here's a zoomed-in version with an extended forecast horizon (in the absence of a shock):

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.