The geometric distributed lag model is y+= x+y(z₁+pzt-1+p²z₁-2+...) + ut, for t=1,2,... where [p]<1 and the error term ut satisfies E(utlZt Zt-1...)=0. Select all of the following statements that are correct.a. If {ut) is not an AR(1) process, we can use yt-2 as an instrument and apply 2SLS estimation and obtain consistent estimates.Ob. If {ut) is an AR(1) process, then we can use the OLS and obtain consistent estimates.O c. If {ut) is not an AR(1) process, we can use yt-1 as an instrument and apply 2SLS estimation and obtain consistent estimates.Od. we can use OLS and obtain consistent estimates in any case.

Given information: Consider the given geometric distributed lag model: yt=α+γzt+ρzt-1+ρ2zt-2+...+ut…

Answered: The geometric distributed lag model is…

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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