applied, Applied Statistics

Question 1

Suppose that you have 150 observations on production (yt) and investment (it), and you have estimated the following ADL(3,2) model:

(1 – 0.5L – 0.1L2 – 0.05L3)yt = 0.7 + (0.2 + 0.1L +0.05L2)it (1)

a. Use this model to describe the dynamic effects of investment on production. Your answer should include a calculation of the impact multiplier and the long-run multiplier.

b. Suppose that you can obtain other output associated with the above regression (eg., the residuals et, the R2, the sum of squared residuals, etc.). Carefully explain how you would test each of the null hypotheses given below.

[Hints: In each case your answer should state the extra output you would need from regression of equation (1), the extra regression(s) that you would need to run, an explanation of how you would construct the test statistic, a statement on the distribution of the test statistic under the null hypothesis, and a brief description of your critical region.]

i. H0: investment has no long run effect on production.

ii. H0: there is no third order serial correlation in the errors.
Posted Date: 1/14/2013 9:35:21 AM | Location : USA

Related Discussions:- applied, Assignment Help, Ask Question on applied, Get Answer, Expert's Help, applied Discussions

Write discussion on applied
Your posts are moderated
Related Questions
For many decades, there has been considerable attention paid to identifying various factors that help to reduce the number of fatalities on Australian roads. In 1964 Victoria and S

If the test is two-tailed, H1:  μ ≠  μ 0  then the test is called two-tailed test and in such a case the critical region lies in both the right and left tails of the sampling distr


Construct your initial multivariate model by selecting a dependent variable Y and two independent variables X. Clearly define what each variable represents and how this relates t

A) The three images shown below were blurred using square masks of sizes n=23, 25, and 45, respectively. The vertical bars on the le_ lower part of (a) and (c) are blurred, but a c

difference between large sample test and small sample test

Each section of the SAT test is supposed to be distributed normally with a mean of 500 and a standard deviation of 100. Suppose 5 students in a class took the SAT math test. They r

The State Department of Taxation wishes to investigate the effect of experience, x, on the amount of time, y, required to fill out Form ST 1040AVG, the state income-averaging form.

Make a decision about the given claim. Do not use any formal procedures and exact calculation. Use only the rare event rule. Claim: A coin favors head when tossed, and there