The serial correlation-robust standard errors are typically larger than the usual OLS standard errors when there is serial correlation.

Question

​The serial correlation-robust standard errors are typically larger than the usual OLS standard errors when there is serial correlation.

Quizplus · Accepted Answer

Serial correlation-robust standard errors account for the existence of serial correlation in the data, which usually increases the variability in the estimation of coefficients. Therefore, the standard errors will be larger than the usual OLS standard errors, which assume no serial correlation.

​The Serial Correlation-Robust Standard Errors Are Typically Larger Than the Usual

The Serial Correlation-Robust Standard Errors Are Typically Larger Than the Usual