Introductory Econometrics 4th Edition by Jeffrey Wooldridge

Exercise 20

In October 1979, the Federal Reserve changed its policy of targeting the money supply and instead began to focus directly on short-term interest rates. Using the data in INTDEF.RAW, define a dummy variable equal to 1 for years after 1979. Include this dummy in equation (10.15) to see if there is a shift in the interest rate equation after 1979. What do you conclude