0 Time

FIGURE 17.10 Hypothetical lag structures.

Time a. Using the preceding formula, find the variance of ßi expressed as

ßi = ä o + ä i i + ä 2i2 ßi = ä 0 + ä i i + ä 2 i2 + ä 3 i3

b. If the variances of cii are large relative to themselves, will the variance of ßi be large also? Why or why not?

17.19. Consider the following distributed-lag model:

Yt = a + ßo Xt + ßi Xt-i + ß2 Xt-2 + ß3 Xt-3 + ß4 Xt-4 + ut

Assume that ßi can be adequately expressed by the second-degree polynomial as follows:

How would you estimate the ß's if we want to impose the restriction that ßo = ß4 = 0?

Was this article helpful?

0 0
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