Unformatted text preview: (b) First regress Y i onto X i and obtain residuals e i . Then regress e i onto e i1 and obtain ˆ ρ . Finally, regress Y * i = Y iˆ ρY i1 onto X * i = X iˆ ρX i1 to obtain an estimate for the slope coeﬃcient. (c) The diﬀerent does not mean that both estimates are unreliable because the OLS estimator has large variance with serial correlation. The CochraneOrcutt method gives an estimator with smaller variance, so the estimate with this method is more reliable than the OLS estimate. 3. (a) False; (b) False; (c) True; (d) False; (e) False; (f) False; (g) False; (h) True; (i) False; (j) True; (l) False; (m) False 1...
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 Fall '07
 OGAKI
 Econometrics, Null hypothesis, dl

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