Econ4261_Hw3

Econ4261_Hw3 - ECON 4261: Introduction to Econometrics Fall...

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Unformatted text preview: ECON 4261: Introduction to Econometrics Fall 2009 Problem Set 3 Due: Nov 17, 2009 Exercise 1 Given the following OLS estimates, C t = constant + 0 . 92 Y t + u 1 t C t = constant + 0 . 84 C t- 1 + u 2 t C t- 1 = constant + 0 . 78 Y t + u 3 t Y t = constant + 0 . 55 C t- 1 + u 4 t Calculate the OLS estimates of 2 and 3 in C t = 1 + 2 Y t + 3 C t- 1 + u t Exercise 2 Prove that y y where y = Ay with A = I- 1 n ii , is the RSS when Y is regressed on x = i . ( i is a column vector of ones) Show also that the estimated coefficient of the regression is Y . Exercise 3 The following regression equation is estimated as a production function for Y: lnY = 1 . 37 + 0 . 632 lnK + 0 . 452 lnL (0 . 257) (0 . 219) R 2 = 0 . 98 cov ( K , L ) = 0 . 055 where standard errors are given in parentheses. Test the following hypothesis: (i) The capital and labor elasticities of output are identical....
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This note was uploaded on 02/23/2011 for the course ECON 4261 taught by Professor Staff during the Fall '08 term at Minnesota.

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Econ4261_Hw3 - ECON 4261: Introduction to Econometrics Fall...

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