The interpretation of the coefficients in a distributed lag regression as causal dynamic effects hinges on
A)the assumption that X is exogenous
B)not having more than four lags when using quarterly data
C)using GLS rather than OLS
D)the use of monthly rather than annual data

Question

Quizplus · Accepted Answer

The interpretation of the coefficients in a distributed lag regression as causal dynamic effects assumes that X, the independent variable, is exogenous. This means that it is not affected by the dependent variable or any other variables in the model. Therefore, choice A is the correct answer. The other options are not relevant to the issue of interpreting coefficients as causal effects.

The Interpretation of the Coefficients in a Distributed Lag Regression