Can you please help me to express b hat I+1 as a function of beta hat

[matthennis]

 

[Deleted member 4993]

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[matthennis]

View attachment 15422

I’ve been going through it and know that I need to find additional values soXi+1’Xi+1 = Xi’Xi + ? But have no idea what that extra bit would be

 

[Romsek]

ever run across the term "innovations" in your text?

 

[matthennis]

ever run across the term "innovations" in your text?

No I haven’t what are they

 

[Romsek]

No I haven’t what are they

Well if it hasn't come up I don't want to send you down some side street.

Basically the innovation is the difference between the latest observation and your best prediction of it given all your previous observations.

Looks kinda like the term you are trying to identify.

 

[matthennis]

Well if it hasn't come up I don't want to send you down some side street.

Basically the innovation is the difference between the latest observation and your best prediction of it given all your previous observations.

Looks kinda like the term you are trying to identify.

I have never heard of it like that before I’ve been advised to solve it by finding values to add on to Xi’Xi. And Xi’Yi to make them equal their I+1 counterparts