Consider the following distributed-lag model:

Assume that βi can be adequately expressed by the second-degree polynomial as follows:

β_i = a₀ + a₁i + a₂i²

How would you estimate the ’s if we want to impose the restriction that β₀ = β₄ = 0?

Transcribed Image Text:

Y, = a + BoX, + BiX,-1 + B2X1–2 + B3X1-3 + B4X1–4 + u;