I) Let Y and X represent inflation rate and unemployment rate respectively. The regression model defined for Phillips Cu

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I Let Y And X Represent Inflation Rate And Unemployment Rate Respectively The Regression Model Defined For Phillips Cu 1 (128.93 KiB) Viewed 48 times

I) Let Y and X represent inflation rate and unemployment rate respectively. The regression model defined for Phillips Curve relationship, Y=B,+B_X+u, is estimated using the 35 years of annual data and the findings are obtained as the following, Σχ2=2688 Σy?=556 Î= 5.8 +0.2 x s.e.(1.2) (0.15) a) Test at 5% significance level if the slope coefficient is statistically significant using a t-test. Interpret the result statistically and practically. Discuss whether your finding supports theoretical expectations of Phillips Curve (20 pt.) (Note: Set the hypotheses) b) Compute and interpret the R2. (10 pt.)