An economist wants to quantify the offect of olectricity prices on the real economy. By using quarterly data, he estimated an FDL model over 1950:01 - 200304 and obtained the following result Y= 1.2-0.007E,- 0.014E, -0.019E, -0.024E, -0.038E, -0.013E, 0.006E, -0.009E, +0.000E, where Y, is the quarterly percentage change in GDP (L.o, = 100ln(GDP/GDP,) and GDP, denotes the value of quarterly gross domestic product in an economy.). E, is the percentage point difference between electricity prices at date t and their maximum value during the past 5 years. Suppose that eloctricity prices jump 27% above their previous peak value and stay at this new higher lovel (so that E, 27 and E Ea 0). Calculate the predicted (percentage point) effect on output growth for each quarter over the next 2 years. Round your responses to two decimal places.) The immediate effect on output in the current period is percent fter 1 quarter Jpercent after 2 quarter percent fter 3 quarter percent
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
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