If Xit is correlated with Xis for different values of s and t,then
A)Xit is said to be autocorrelated
B)the OLS estimator cannot be computed
C)statistical inference cannot proceed in a standard way even if clustered standard errors are used
D)this is not of practical importance since these correlations are typically weak in applications

Question

Quizplus · Accepted Answer

If Xit is correlated with Xis for different values of s and t, it indicates that Xit is autocorrelated. Autocorrelation can lead to biased and inefficient estimates, and so it is important to account for it in statistical analysis.

If Xit Is Correlated with Xis for Different Values of S