1. Persistence of observational errors.
2. Persistence of the effects of a shock.
3. Sluggishness of economic time series.
4. Averaging of extrapolating data.
5. Faulty functional form of the model and often made by specifying the functional form whereby instead of specifying quadratic or cubic form, a linear form is specified.
Jonmhumble answered the question on October 29, 2017 at 17:32
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