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ECON 307 reading 4 - rate of convergence and the parameters...

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Farebrother explains the Durbin-Watson test for serial correlation when there is no interception in the regression. Significance points can be found within three decimal places by binary sections of the interval. We can then choose the number whose probability is closer to significance level. With the body of the tables at a given variable it can be evaluated using author’s Algol translation of Koerts and Abrahmse’s Imhof procedure. The truncation error, order of smallness,
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Unformatted text preview: rate of convergence, and the parameters need to be set at a very low figure like 0.00001. Once you have completed the procedure you should be able to come up with something that agree’s with Koerts and Abrahamse’s tables and with minor exceptions should essentially agree with Savin and White’s as well. It was also found that extension of the tables for lager values of n is impractical and costs no more than ten CPU seconds to obtain a significant point to begin with....
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