Consider the following simple relationship between aggregate savingsSt and aggregate income Yt:St= a + BYt + εt, t = 1, ..., T.For some country this relationship is estimated by OLS over the years1956-2005 (T = 50). The results are given below:=Variable CoefficientsConstant38.90Y0.09822.57, R² = 0.93, DW = 0.70Standard error4.570.009where ô is the standard error of regression, R² is the multiple correla-tion coefficient, and DW is the Durbin-Watson statistic.(a) Explain why the result indicate that there may be a problem ofpositive autocorrelation. Can you give arguments why in eco-nomic models positive autocorrelation is more likely than nega-tive one?

The test statistic for testing autocorrelation is DW= 0.70

Answered: Consider the following simple…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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