Consider the ADL model (Y_{t}=3.1+0.4 Y_{t-1}+2.0 X_{t}-0.8 X_{t-1}+widetilde{u}_{t}), where (X_{t}) is strictly exogenous. a. Derive the impact

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Consider the ADL model $Y_{t}=3.1+0.4 Y_{t-1}+2.0 X_{t}-0.8 X_{t-1}+\widetilde{u}_{t}$, where $X_{t}$ is strictly exogenous.

a. Derive the impact effect of $X$ on $Y$.

b. Derive the first five dynamic multipliers.

c. Derive the first five cumulative multipliers.

d. Derive the long-run cumulative dynamic multiplier.

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Introduction To Econometrics

ISBN: 9780134461991

4th Edition

Authors: James Stock, Mark Watson

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Consider the ADL model (Y_{t}=3.1+0.4 Y_{t-1}+2.0 X_{t}-0.8 X_{t-1}+widetilde{u}_{t}), where (X_{t}) is strictly exogenous. a. Derive the impact

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Introduction To Econometrics

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