ARMA stands for Autoregressive Moving Average, which is a class of statistical models used for analyzing and forecasting time series data. It combines two components: the autoregressive (AR) part, which uses past values of the series to predict future values, and the moving average (MA) part, which uses past forecast errors to improve the predictions. This combination allows ARMA models to effectively capture different patterns in time series data, making them a powerful tool in econometrics.
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