Exercises Questions

17.1. Explain with a brief reason whether the following statements are true, false, or uncertain:

a. All econometric models are essentially dynamic.

b. The Koyck model will not make much sense if some of the distributed-lag coefficients are positive and some negative.

c. If the Koyck and adaptive expectations models are estimated by OLS, the estimators will be biased but consistent.

d. In the partial adjustment model, OLS estimators are biased in finite samples.

e. In the presence of a stochastic regressor(s) and an autocorrelated error term, the method of instrumental variables will produce unbiased as well as consistent estimates.

f. In the presence of a lagged regressand as a regressor, the Durbin-Watson d statistic to detect autocorrelation is practically useless.

g. The Durbin h test is valid in both large and small samples.

h. The Granger test is a test of precedence rather than a test of causality.

17.4. Assume that prices are formed according to the following adaptive expectations hypothesis:

where P* is the expected price and P the actual price.

64For applications of these models, see Arnold C. Harberger, ed., The Demand for Durable Goods, University of Chicago Press, Chicago, 1960.

Gujarati: Basic I III. Topics in Econometrics I 17. Dynamic Econometric I I © The McGraw-Hill

Econometrics, Fourth Models: Autoregressive Companies, 2004 Edition and Distributed-Lag



Complete the following table, assuming y = 0.5*:


Rules Of The Rich And Wealthy

Rules Of The Rich And Wealthy

Learning About The Rules Of The Rich And Wealthy Can Have Amazing Benefits For Your Life And Success. Discover the hidden rules and beat the rich at their own game. The general population has a love / hate kinship with riches. They resent those who have it, but spend their total lives attempting to get it for themselves. The reason an immense majority of individuals never accumulate a substantial savings is because they don't comprehend the nature of money or how it works.

Get My Free Ebook

Post a comment