An end-to-end case exposes how definitions affect transformations, transformations affect models, and evaluation design affects conclusions.

Base stats; dplyr, ggplot2, forecast, and fable are maintainable extensions.

RMSE = sqrt(mean((actual-forecast)^2)); MAE = mean(abs(actual-forecast))

1. Step 1Define every variable and unit.
2. Step 2Check assumptions and information timing.
3. Step 3Calculate, verify, and interpret in context.

Variable

The PDF documents 114 monthly observations, January 2017–June 2026, frozen 2026-08-11; the separate CSV was not supplied here.

Model choice

RMSE emphasizes large errors; MAE weights absolute errors linearly, so model rank can depend on decision loss.

Calculation

The self-contained lab demonstrates common scoring. In the authoritative book run, ARIMA had holdout RMSE 0.581 and MAE 0.437 percentage points.

Interpretation

That result supports ARIMA for one frozen educational exercise, not universally.

Reasonableness check

The study lacks real-time vintages, survey expectations, commodity prices, output gaps, release calendars, parameter-uncertainty integration, and repeated final test origins.

That result supports ARIMA for one frozen educational exercise, not universally. Limitation: The study lacks real-time vintages, survey expectations, commodity prices, output gaps, release calendars, parameter-uncertainty integration, and repeated final test origins.

ARIMA has the lowest reported RMSE and MAE in the single 18-month book exercise.

Run the self-contained starter code in the protected STATLAB R runner. The code prints an auditable result and avoids network or unrestricted file access.

Compare your result with the definition, units, and model assumptions—not only with a target number.

Complete these without looking at the selected solutions. More than one defensible program may exist.

These are compact solution routes. Confirm dimensions, units, and any changed modelling choices.

Assemble provenance, validation, exploration, benchmarks, ARIMA diagnostics, holdout scoring, and responsible communication.

Name the assumption, evidence you would seek, and how the recommendation might change.

Reach 70% to complete the chapter. Explanations appear after submission.