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What overall conclusion do you draw

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Monte Carlo experiment: Consider the following model:

Yi = β1 + β2 X2i + β3 X3i + ui

You are told that β1 = 262, β2 = -0.006, β3 = -2.4, σ 2 = 42, and ui ∼ N(0, 42). Generate 10 sets of 64 observations on ui from the given normal distribution and use the 64 observations given in Table 6.4, where Y = CM, X2 = PGNP, and X3 = FLR to generate 10 sets of the estimated β coef?- cients (each set will have the three estimated parameters). Take the averages of each of the estimated β coef?cients and relate them to the true val- ues of these coef?cients given above. What overall conclusion do you draw?

Reference no: EM13882078

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