Consider the following model: Yt = B1 + B2X2t B3X3t + B4X4t + ut Suppose the error

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Consider the following model:
Yt = B1 + B2X2t B3X3t + B4X4t + ut
Suppose the error term follows the AR(1) scheme in Eq. (10.6). How would you transform this model so that there is no autocorrelation in the trans-formed model?

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Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

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Question Posted: Apr 12, 2016 07:33 AM

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Consider the following model: Yt = B1 + B2X2t B3X3t + B4X4t + ut Suppose the error

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