Time Series, Hypothesis testing and Auto CorrelationGiven the following regression modely = B, + B,x, +u,Where N = 60Ut= Piut-1 + Et Suppose you estimated the following regression and obtain results as outlined below.Standard errors in parentheses.A y, = 2.4 + 0.926y,-1 +u,(0.224) (0.043)Test the hypothesis that y, has a unit root vs the alternative that it does not at the 5%level of significance.

Unit root test is used to find the trend and stationary in the time series data. There are 3 types…

Answered: Given the following regression model y…

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Given the following regression model y = B, + B,x, +u, Where N = 60 Ut P1ut-1 + Et

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Time Series, Hypothesis testing and Auto Correlation
Given the following regression model
y = B, + B,x, +u,
Where N = 60
Ut
= Piut-1 + Et

Suppose you estimated the following regression and obtain results as outlined below.
Standard errors in parentheses.
A y, = 2.4 + 0.926y,-1 +u,
(0.224) (0.043)
Test the hypothesis that y, has a unit root vs the alternative that it does not at the 5%
level of significance.

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