Example 2.2 discusses Okun's law, as shown in Eq. (2.22). This equation can also be written as
Question:
a. Estimate the preceding regression, obtaining the usual results as per Eq. (3.46).
b. Is the change in the unemployment rate a significant determinant of percent growth in real GDP? How do you know?
c. How would you interpret the intercept coefficient in this regression? Does it have any economic meaning?
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