Monte Carlo experiment Consider the following model Y i 1 2 X 2i 3 X 3i u i You are told that 1 262, 2 0 006, 3 2 4, 2 42, and u i N(0, 42) Generate 10 sets of 64 observations on u i from the given normal distribution and use the 64 observations given in the following table, where Y CM, X 2 PGNP, and X 3 FLR to generate 10 sets of the estimated coefficients (each set will have the three estimated parameters) Take the averages of each of the estimated coefficients and relate them to the true values of these coefficients given above What overall conclusion do you draw

Question: Monte Carlo experiment: Consider the following model: Y i = ? 1 + ? 2 X 2i + ? 3 X 3i + u i

Monte Carlo experiment: Consider the following model:

Y_i = ?₁ + ?₂X_2i + ?₃X_3i + u_i

You are told that ?₁ = 262, ?₂ = ?0.006, ?₃ = ?2.4, ?² = 42, and u_i??N(0, 42).

Generate 10 sets of 64 observations on u_i?from the given normal distribution and use the 64 observations given in the following table, where Y = CM, X₂ = PGNP, and X₃ = FLR to generate 10 sets of the estimated? coefficients (each set will have the three estimated parameters).Take the averages of each of the estimated? coefficients and relate them to the true values of these coefficients given above. What overall conclusion do you draw?

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