[See Solution] From a sample of 79 quarterly observations the following model was estimated using OLS y ˆ 0.0027 0.7916 x , where y is the nominal interest
Question: From a sample of 79 quarterly observations the following model was estimated
using OLS
y ˆ 0.0027 0.7916 x ,
where y is the nominal interest rate and x is inflation. The R 2 is 0.097 and the estimated standard error of the estimator for the slope is 0.2759.
- Interpret the estimate for the slope and the value obtained for R 2.
- Test the hypothesis that the slope coefficient is less than or equal to zero against the hypothesis that it is greater than zero. Interpret the result.
- Test the hypothesis that the slope coefficient is equal to 1 against the hypothesis that it is different from 1. Interpret the result.
Deliverable: Word Document 