The following table gives data on the hourly compensation rate in manufacturing in U.S. dollars, Y (%),

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The following table gives data on the hourly compensation rate in manufacturing in U.S. dollars, Y (%), and the civilian unemployment rate, X (index, 1992 = 100), forCanada, the United Kingdom, and the United States for the period 1980?2006.

Consider the model:

Yit = ?1 + ?2Xit + uit ?????. (1)

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a. A priori, what is the expected relationship between Y and X? Why?

b. Estimate the model given in Eq. (1) for each country.

c. Estimate the model, pooling all of the 81 observations.

d. Estimate the fixed effects model.

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Related Book For  book-img-for-question

Basic Econometrics

ISBN: 978-0073375779

5th edition

Authors: Damodar N. Gujrati, Dawn C. Porter

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