It has been argued that Canada's aggregate output growth and unemployment rates are
very sensitive to United States economic fluctuations, while the opposite is not true.
(a)A researcher uses a distributed lag model to estimate dynamic causal effects of U.S.
economic activity on Canada.The results (HAC standard errors in parenthesis)for the
sample period 1961:I-1995:IV are: where urcan is the Canadian unemployment rate, and urus is the United States
unemployment rate.
Calculate the long-run cumulative dynamic multiplier.

Question

It has been argued that Canada's aggregate output growth and unemployment rates are
very sensitive to United States economic fluctuations, while the opposite is not true.
(a)A researcher uses a distributed lag model to estimate dynamic causal effects of U.S.
economic activity on Canada.The results (HAC standard errors in parenthesis)for the
sample period 1961:I-1995:IV are:  where urcan is the Canadian unemployment rate, and urus is the United States
unemployment rate.
Calculate the long-run cumulative dynamic multiplier.

Quizplus · Accepted Answer

The Answer of It has been argued that Canada's aggregate output growth and unemployment rates are
very sensitive to United States economic fluctuations, while the opposite is not true.
(a)A researcher uses a distributed lag model to estimate dynamic causal effects of U.S.
economic activity on Canada.The results (HAC standard errors in parenthesis)for the
sample period 1961:I-1995:IV are:  where urcan is the Canadian unemployment rate, and urus is the United States
unemployment rate.
Calculate the long-run cumulative dynamic multiplier.

It Has Been Argued That Canada's Aggregate Output Growth and Unemployment