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Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609Introductory Econometrics 4th Edition by Jeffrey Wooldridge
Edition 4ISBN: 978-0324660609 Exercise 11
Consider the error correction model in equation. Show that if you add another lag of the error correction term, yt-2 - xt-2, the equation suffers from perfect collinearity. (Hint: Show that yt-2 - xt-2 is a perfect linear function of yt-1 - xt-1, xt-1, and yt-1.)
Equation
Equation
Explanation
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Verified
Following the hint, 
can be wr...
Introductory Econometrics 4th Edition by Jeffrey Wooldridge
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