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Engineering, 07.12.2019 00:31 roselyn3301

Consider the same model in a time series context, namely, yt = β0 + β1xt + ut, t = 1, . . , t where ut = rhout−1 + vt, |rho| < 1, vt is i. i.d. with e(vt) = 0 and var(vt) = σ 2 v . (a) what is the problem in using ols to estimate the model? is there any problem in hypothesis testing?

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Consider the same model in a time series context, namely, yt = β0 + β1xt + ut, t = 1, . . , t where...

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