Suppose you specify the following linear regression model relating exchange rate in year t (x,) and growth rate in exports in year t (y) for a small country in Asia. у, 3 Во + В,х, + €, where ɛ is the error term a. Assuming that this simple linear regression model fulfills all the classical assumptions we discussed in class, please show that the OLS estimator for the intercept of the simple linear regression model is an unbiased estimator. [Hint: Use the same technique we used
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.
![4. Suppose you specify the following linear regression model relating exchange rate in
year t (x,) and growth rate in exports in year t (y) for a small country in Asia.
y, = B, + B,x, + ɛ,
where & is the error term
a. Assuming that this simple linear regression model fulfills all the classical assumptions
we discussed in class, please show that the OLS estimator for the intercept of the simple
linear regression model is an unbiased estimator. [Hint: Use the same technique we used
3
in class to demonstrate the unbiasedness of the OLS estimator of the slope.]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f0f75c0-3249-407a-add1-ee5a7c3bf05e%2F25af739a-fa4c-4aeb-87cf-682cf6759cf5%2Fp2n93z_processed.png&w=3840&q=75)
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