1. Suppose that we are interested in measuring the relationship between hourly wage and output productivity in the U.S economy. Variables hrwage(t) and outphr(t) denote the average hourly wage and output productivity in the U.S economy for year t. We start by estimating the model specification shown in equation (1) below: log(hrwage) = Bo+B₁ log(outphr₂) + ut. where log(.) denotes the natural logarithm and ut is the error term. (a) Provide a brief interpretation of parameters 0 and 1 in (1).
1. Suppose that we are interested in measuring the relationship between hourly wage and output productivity in the U.S economy. Variables hrwage(t) and outphr(t) denote the average hourly wage and output productivity in the U.S economy for year t. We start by estimating the model specification shown in equation (1) below: log(hrwage) = Bo+B₁ log(outphr₂) + ut. where log(.) denotes the natural logarithm and ut is the error term. (a) Provide a brief interpretation of parameters 0 and 1 in (1).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter5: Business And Economic Forecasting
Section: Chapter Questions
Problem 1.6CE: Estimate the double-log (log linear) time trend model for log cruise ship arrivals against log time....
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