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
Analysis of variance allows us to test whether the differences among more than two sample means are significant or not. This technique overcomes the drawback of the method used in

Let X, Y, and Z refer to the three random variables. It is known that Var(X) = 4, Var(Y) = 9, and Var(Z) = 16. It is further known that E(X) = 1, E(Y) = 2, and E(Z) = 4. Furthermor

The proportion of American Express credit-card holders who pay their credit card bill in full each month is 23%; the other 77% make only a partial or no payment. (a) In a random

Mode Mode is the value of the observation which occurs with the   greatest  frequency and thus  it is the most fashionable value, Mode has been derived from French  word  La  m

To study the physical fitness of a sample of 28 people, the data below was collected representing the  number of sit-ups that a person could do in one minute.      10    12


Celia is a nurse in a geriatric ward.  She noticed that older persons in her care are having problems sleeping at night.  She decided to introduce non-pharmocologic ways of relaxat

Level of Significance: α The main purpose of hypothesis testing is not to question the computed value of the sample statistic, but to make judgment about the difference between

The investor has constant wealth 1 and is o?ered to invest in shares of a project that either gains 3=2 or loses 1 with equal probabilities. Therefore, if the investor obtains sha

Analysis of covariance (ANCOVA) It is initially used for an expansion of the analysis of variance which permits to the possible effects of continuous concomitant variables (suc