Question: (i) Using the data in WAGEPRC, estimate the distributed lag model from Problem 5 in Chapter 11. Use regression (12.14) to test for AR(1) serial

(i) Using the data in WAGEPRC, estimate the distributed lag model from Problem 5 in Chapter 11.

Use regression (12.14) to test for AR(1) serial correlation.

(ii) Reestimate the model using iterated Cochrane-Orcutt estimation. What is your new estimate of the long-run propensity?

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