Question: Econometrics is not just about complex mathematical model; one needs to understand economic theory before they can do estimation of the parameters. As a

Econometrics is not just about complex mathematical model; one needs to understand

Econometrics is not just about complex mathematical model; one needs to understand economic theory before they can do estimation of the parameters. As a junior econometrician you are required to do the following in line with the methodology of econometrics. A. Derive the Maximum Likelihood estimator for the intercept and slope to test the relationship between government policy and economic recovery. [10 marks] B. What are the properties of these estimators? C. Prove that the estimators are unbiased and have minimum variances, [5 marks] [5 marks] D. What steps will you undertake to obtain empirical evidence of the relationship between government policy and economic recovery as well as be able to comment on the decision? [5 marks] E. What is the importance of a stochastic term in the relationship stated above? [5 marks]

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A Deriving the Maximum Likelihood Estimator MLE for the intercept and slope to test the relationship between government policy and economic recovery Lets consider a simple linear regression model to t... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

On November 1 2014, Fain Corporation paid principal and interest on a 6 month, 8% note payable with a face amount of $5000. How did this affect Fain financial statement? Exp Liabilities Stk Rev Net...

Introduction Some 25 years ago, one of the authors wrote an article (Stevens, 1989) that sought to explicate the state-of-the-art in supply chain management (SCM). This was at a time when SCM was...

Your uncle has a caf is considering investing in a new project line to expand her caf business to a larger scale that is more of a restaurant like. It is expected that an initial investment of...

Initial investment-Basic calculation Cushing Corporation is considering the purchase of a new grading machine to replace the existing one. The existing machine was purchased 3 years ago at an...

OPERATIONS MANAGEMENT SIMULATION Give definitions or descriptions of Hard OR and Soft OR and discuss some examples of each. (Your answer should not be more than approximately two A4 pages.)...

SUMMARY this article for about 2 pages with single spacing. Thank you. ECONOMETRICS: MEASUREMENT I N ECONOMICS1 I As the first incumbent of a new Chair in this University, I thought that in this...

eco9 Read Case 5-1: Netflix on pages 181-182. Complete one of the following for your original post. Responses to peers can include additional examples from personal experience, additional support for...

MATHEMATICS FOR MACHINE LEARNING Marc Peter Deisenroth A. Aldo Faisal Cheng Soon Ong Contents Foreword 1 Part I Mathematical Foundations 9 1 Introduction and Motivation 11 1.1 Finding Words for...

Journal of Change Management Vol. 11, No. 2, 207- 221, June 2011 Organizational Development Goes Digital: Applying Simulation to Organizational Change JOSEPH B. LYONS , JEREMY JORDAN , PAUL FAAS &...

Two articles will be attached below in order to understand the question given. The main effects of Regulation Q Restrictions and technological changes on the scale economies for commercial banks. In...

Explain two internal controls the school is implementing well, two internal controls the school could improve on, and two internal controls that could open the door to fraud.

What is the angle formed between the large lobes of the three sp2 hybrid orbitals? Enter your answers numerically. Submit Request Answer

Evaluate the integral. 0 5 ( 5 x 2 - 6 x 7 ) d x 0 5 ( 5 x 2 - 6 x 7 ) d x = ( Simplify your answer )

David Barnes and his fiancée Valerie Shah are visiting Hawaii. At the Hawaiian Cultural Center in Honolulu, they are told that 2 out of a group of 8 people will be randomly picked for a free...

More and more households are struggling to pay utility bills given a shaky economy and high heating costs (The Wall Street Journal, February 14, 2008). Particularly hard hit are households with homes...

Twenty cancer patients volunteer for a clinical trial. Ten of the patients will receive a placebo and 10 will receive the trial drug. In how many different ways can the researchers select 10 patients...

Why are cash and time critical elements in investment decisions?

A recent poll asked 16- to 21-year-olds whether or not they are likely to serve in the U.S. military. The following table, cross-classified by gender and race, reports the percentage of those polled...

limit as x approaches 0^- of absolute value sin x *1/sinx

The following information is available for Mandalay Company: Required(a) Determine the material price variance based on the quantity of materials purchased.(b) Determine the material quantity...

Traditional cost reduction versus target costing Traditional cost reduction in the United States differs significantly from the Japanese method of target costing. Required Discuss the similarities...

Characteristics of a MACS: ethical framework List and describe the hierarchy of ethical considerations.

Rose purchased units of the Trimark Fund one year ago at $24.10 per unit. Today they are valued at $25.50. On the intervening December 31, there was a distribution of $0.83 per unit. (Distribution is...

A life insurance company pays investors 5% compounded annually on its five-year GICs. For you to be indifferent as to which compounding option you choose, what would the nominal rates have to be on...

A credit union pays 5.25% compounded annually on five-year compound-interest GICs. It wants to set the rates on its semiannually and monthly compounded GICs of the same maturity so that investors...