(c) Why is an assumption that the error term is uncorrelated with fu- ture values of explanatory variables a challenging assumption for single- equation models? (d) Define a dynamic model in time-series analysis and explain why dy- namic models are preferable to static ones.

(c) Why is an assumption that the error term is uncorrelated with fu- ture values of explanatory variables a challenging assumption for single- equation models? (d) Define a dynamic model in time-series analysis and explain why dy- namic models are preferable to static ones.

Name: (c) Why is an assumption that the error term is uncorrelated with fu-
Uploaded: 2024-03-20T07:07:37.000Z
Channel: Bartleby
Description: (c) Why is an assumption that the error term is uncorrelated with fu-ture values of explanatory variables a challenging assumption for single-equation models?(d) Define a dynamic model in time-series analysis and explain why dy-namic models are pref

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

See similar textbooks

Similar questions

Consider the following models estimated using regression analysis applied to time-series data. What is the long-term effect of a 1-unit increase in x in period t? a. yt = 10 + 2xt + 0.34yt-1 b. yt = 10 + 2.5xt + 0.24yt-1 c. yt = 10 + 2xt + 0.64yt-1 d. yt = 10 + 4.3xt + 0.34yt-1
Consider the following initial-value problem.
1 Suppose that X is a stochastic process with dynamics dXt = µdt +σdWt , where W is a P-Brownian motion. The drift µ and the volatility σ are both constants. Find if there is a measure Q such that the drift of process X under Q is η(∈ R) instead of µ.
The following facts about a company are known: 1. At present, its total capital is £3 million. 2. It has just sold zero-coupon bonds with the total nominal value of £2 million which it promises to repay in 18 months from now. 3. The total capital F(t) of the company follows the geometric Brownian motion with parameters µ = 0.15 and σ = 0.2. The continuously compounded annual interest rate r = 6%. Within the framework of the Merton model, establish the following. (c)What is the probability that the company would default on its promise to bond holders?
Please answer this question using the assumptions from the Solow Model In a country, the production function in terms of output per capita, y, and capital per labor, k, is y = k(12) The fraction of output saved, s, is 25% and the depreciation rate, δ, is 0.05. Assume that the population does not grow. What is the steady-state of capital per worker, k*, and output per worker, y*? What happens to the steady-state values if the population growth rate rises to 5%? By how much would the country have to increase its savings rate in b) in order to reach the same levels of steady-state values as in a)? Does the country’s growth rate increase in c) compared to a)? how?
You are considering an investment in Justus Corporation's stock, which is expected to pay a dividend of $1.75 a share at the end of the year (D1 = $1.75) and has a beta of 0.9. The risk-free rate is 5.4%, and the market risk premium is 6%. Justus currently sells for $21.00 a share, and its dividend is expected to grow at some constant rate, g. Assuming the market is in equilibrium, what does the market believe will be the stock price at the end of 3 years? (That is, what is ?) Do not round intermediate calculations. Round your answer to the nearest cent.
The initial value problem
How might the competitive-hunter model be validated? Include adiscussion of how the various constants a, b, m, and n might beestimated. How could state conservation authorities use the modelto ensure the survival of both species?
1. The number N(t) of supermarkets throughout the country thatare using a computerized checkout system is described by theinitial-value problemdN/dt = N(1 - 0.0005N), N(0) = 1.(a) Use the phase portrait concept of Section 2.1 to predicthow many supermarkets are expected to adopt the newprocedure over a long period of time. By hand, sketch asolution curve of the given initial-value problem.(b) Solve the initial-value problem and then use a graphingutility to verify the solution curve in part (a). How manycompanies are expected to adopt the new technology whent = 10?
Find an explicit solution of the given initial-value problem.
The two-tank system of Problem 19 in Section 7.1 leads to the initial value problem x′=(−110340110−15)x,x(0)=(−17−21),x′=−110340110−15x,x0=−17−21, where x1 and x2 are the deviations of the salt levels Q1 and Q2 from their respective equilibria.Plot x1 versus t and x2 versus t on the same set of axes.
Sketch the phase portrait for the competing species system: y'1 = y1(1 − y1 − 2y2) y'2 = y2(1 − y2 − 2y1) In particular, for full credit you must show the equilibrium points, nullclines, and some representative trajectories. Based on your phase diagram, what will happen to the populations of the two species in the long term?