The variable SHIFT is best described as: A. an indicator variable. B. a dependent variable. C. a
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The variable SHIFT is best described as:
A. an indicator variable.
B. a dependent variable.
C. a continuous variable.
An analyst is examining the annual growth of the money supply for a country over the past 30 years. This country experienced a central bank policy shift 15 years ago, which altered the approach to the management of the money supply.
The analyst estimated a model using the annual growth rate in the money supply regressed on the variable (SHIFT) that takes on a value of 0 before the policy shift and 1 after. She estimated the values in Exhibit 1:
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