+1 (347) 474-1028 info@essayparlour.com

where the error term follows a weird serial cor… Show more

Paper help Economics where the error term follows a weird serial cor… Show more

Economics

where the error term follows a weird serial cor… Show more

where the error term follows a weird serial cor… Show more we have a true model with Yt = b0 + b1Xt + b2Yt + Et where the error term follows a weird serial correlation: Et = Et-1 + Ut. Ut is perfectly well-behaved random variable with 0 mean and constant variance. cov(Ut,Us) = 0 when t is different from s. a. state the consequences of estimating this model using OLS? what kind of Gauss-Markow assumptions that it happens to violate. b. find a transformation of the data to be able to use the same data to estimate a model that satisfies the Gauss-Markov assumptions. be clear and explicit about the process. clearly explain why the transformed model meets the Gauss-markov assumption. * this kind of model is random walk serial correlation. • Show less

Order Now

Ready to try a high quality writing service? Get a discount here