What is time-series data? What are its components?

Time series data is a chronological sequence of a series of values of a variable. In other words, the data is time-stamped. It can be a discrete or continuous time series. Discrete-time series are observations taken at specific times while continuous time series are observations that are made continuously over time. It can be univariate …

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5 BEST Econometrics (EASY) Books for Beginners No One Wants to Reveal

5 BEST Econometrics (Easy) Books for Beginners No One Wants to Reveal To decide on the Econometrics books is not easy for a beginner. One can feel overwhelmed with the content of the books if one is unfamiliar with the concepts of Mathematics, Economics and Statistics. Most of the Universities prescribe following two books; Basic …

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13 Most Common Econometrics Models for Researchers and Students

Last week, I talked to a lot of students of Econometrics regarding the most difficult challenge they faced in Econometrics. The most common issue that emerged out of that discussion is constructing an econometrics model that is suitable for the data in hand and/or real world. Most often, data is not reliable as economists have …

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How to Write Literature Review for Thesis ?

How to write literature review for thesis? What is Literature Review? Literature review for thesis or dissertation is the part with extensive reference to related research in your field. It is where you establish connection between the source texts, position yourself among these sources, and update the readers with the fill in. The purpose of …

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What is variance? How it differs from co-variance? How these are related to correlation?

What is variance? How it differs from co-variance? How these are related to correlation? The variance means the quality of being different divergent from the norm. It measures how far each number in the set is from the mean (average), and thus from every other number in the set. Variance is often depicted by this symbol: σ2. …

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What is Real Business Cycle model? How is it different from the Keynesian model? Role in DSGE model?

Real business cycle model is based on business cycles and incorporates technological shock as the prime reason for fluctuation in economic activity. Money is neutral with no impact on real variables.  These models hold the view that fluctuations in aggregate economic activity are an antidote to the uncertainty in agents’ environment arising from exogenous technology …

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Basic features of DGSE model

Dynamic General Stochastic Equilibrium (DGSE) models are well grounded theoretically, in harmony with the empirical evidence to predict and provide accurate interpretation of past and present economic events. The term Dynamic implies the model is time-dependent. It involves expectations regarding future outcomes tightly knit with the present decision of the economic agents. Economic agents’ objective …

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Everything You Ever Wanted to Know About Building Your Econometrics Model

There is little doubt that every economic theory we studied is based on theoretical modeling first. It sprouted from an idea which later on was served to the world with improvements; assumptions, hypothesis tests and results came into prominence. These models are all the simplified versions of reality. Starting from the most basic law of …

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Top 3 Model Specification Tests in Econometrics​

Top 3 Model Specification Tests in Econometrics Ramsey’s Reset Test Non-nested F test or Encompassing F test Davidson Mackinnon J test This test is used to test mis-specification of models. In this test we run regression on model 1 and obtain estimated value of regressand and then use the square and cube of  estimated value …

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5 YouTube Channels for learning Econometrics online

During the lock down, classes shifted online and few YouTube channels started imparting the knowledge in a new avatar. As we know, learning econometrics online or offline is a tedious affair. But, these channels’ approach to present the subject to the audience have a different hue altogether. Fresh outlook and precise explanation. We present you …

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Heteroscedasticity test procedure: 5-steps method to understand Goldfield-Quandt and the White Test for Heteroscedasticity

Goldfield-Quandt Step 1: Get the data. Step 2: Second step involves arranging the X1 values from lowest to highest order. Then, divide the series into two groups, n1 and n2 and remember n1, and n2 must less than N/2. n1,n2 being the size of first and second group respectively and N is the size of …

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