An “Arch model” is a finance model that is used to describe the relationship between two variables. The model is based on the assumption that there is a linear relationship between the two variables. The model is used to predict the future values of one variable, based on the past values of the other variable. The model can be used to predict the future values of financial instruments, such as stocks and bonds.
The model can also be used to predict the future values of economic indicators, such as inflation and GDP.
The “Arch model” is named after the shape of the graph that is produced when the two variables are plotted against each other. The graph looks like an arch, hence the name.