I need to plot an Ar(1) graph for the process yk = 0.75yk-1 + ek.
for y0=1 and another graph for y0=10.
assume ek is uniformly distributed on interval [-0.5,0.5].
i have the following code but i am not sure how to control y0.
I'm having trouble calculating the likelihood of a time series with AR(1) errors. I am generating my covariance matrix according to page 2 of (http://cran.r-project.org/doc/contrib/Fox-Companion/appendix-timeseries-regression.pdf), using the library mvtnorm and the multivariate normal...