econometrics (Page 312)

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indefinitely), the ML estimator of σ 2 is also unbiased. Since the method of least squares with the added assumption of normality of ui provides us with all the tools necessary for both estimation and hypothesis testing of the linear regression models, there is no loss for readers who may not want to pursue the maximum likelihood method because of its slight mathematical complexity. 4.5 SUMMARY AND CONCLUSIONS 1.This chapter discussed the classical normallinear regression model (CNLRM). 2.This model differs from the classical linear regression model (CLRM) in that it specifically assumes that the disturbance term ui entering the regression model is normally distributed. The CLRM does not require any assumption about the probability distribution of ui; it only requires that the
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