Figure 1
A line graph displays the cumulative sum of recursive residuals. The horizontal axis ranges from 12 to 23, and the vertical axis ranges from -20 to 20. Two lines are present: a blue line labeled 'CUSUM' and two brown lines labeled '5% Significance'. The blue line fluctuates around the zero mark, while the brown lines diverge from each other, creating a funnel shape. The blue line remains within the bounds set by the brown lines throughout the range.CUSUM: Plot of the cumulative sum of the recursive residuals. Note: The straight lines represent the critical bounds at the 5% significance level. Source(s): Authors' calculations; created by authors