The inverted V distributed-lag model. Consider the k-period finite distributed-lag model

F. DeLeeuw has proposed the structure for the ’s as in Figure 17.11, where the ’s follow the inverted V shape. Assuming for simplicity that k (the maximum length of the lag) is an even number, and further assuming that β0 and βk are zero, DeLeeuw suggests the following scheme for the ’s:*

β_i = iβ, 0 ‰¤ i ‰¤ k/2

= (k ˆ’ i )β, k/2 ‰¤ i < k

How would you use the DeLeeuw scheme to estimate the parameters of the preceding k-period distributed-lag model?

Transcribed Image Text:

|Y, = a + BoX; + B1 X,-1 + B2X,_2 + …+ B;X1-k + u;