Explain why it is difficult to estimate precisely the partial effect of (X_{1}), holding (X_{2}) constant, if

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Explain why it is difficult to estimate precisely the partial effect of $X_{1}$, holding $X_{2}$ constant, if $X_{1}$ and $X_{2}$ are highly correlated.

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Introduction To Econometrics

ISBN: 9780134461991

4th Edition

Authors: James Stock, Mark Watson

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Question Posted: Apr 30, 2024 02:01 AM

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Explain why it is difficult to estimate precisely the partial effect of (X_{1}), holding (X_{2}) constant, if

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When X1 and X2 are highly correlated it means that changes in X1 are often associated with chang...View the full answer

Introduction To Econometrics

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