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 …
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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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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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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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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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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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 …
CRDW Test The term “CRDW” (Cointegration Regression Durbin Watson) does not correspond to a specific test or method in econometrics. It seems to be a combination of two different concepts. First is the cointegration in the regression. Then, use the Durbin-Watson test to find the serial correlation for the existence of cointegration among the series, …
MacKinnon, White and Davidson(MWD) test The MacKinnon, White, and Davidson (MWD) test, also known as the Heteroscedasticity and Autocorrelation Consistent (HAC) test, is a statistical test used in econometrics to assess the presence of heteroscedasticity and autocorrelation in regression models. It is an extension of the White test that allows for robust inference when these …
Panel Data, also known as Longitudinal data, is a combination of both Cross-Section and Time Series Data. It is usually called Cross-sectional Time-series data as it is a collection of observations for multiple subjects at multiple instances. Panel data series can be any of the following four types. Long Panel Data Wide Panel Data Balanced …
