Consider the following model: i=1 # inflation + zout put gap. He rit=a+Blinflationt-B2outputyapttet where: 1 l is the lo

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Consider The Following Model I 1 Inflation Zout Put Gap He Rit A Blinflationt B2outputyapttet Where 1 L Is The Lo 1 (68.59 KiB) Viewed 37 times

Consider the following model: i=1 # inflation + zout put gap. He rit=a+Blinflationt-B2outputyapttet where: 1 l is the log of the interest rate; 1 inflation is the inflation rate; i outputgap, is the difference between the actual and the potential output; 2 Ek is a random error term. Estimate the model via OLS using quarterly data from 2005 to 2015. Table 1: OLS estimates using 84 observations Dependent variable: interest rate (1) Variable C INFLATION OUTPUT R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likeihood F-statistic Prob(F-statistic) Coefficient 1.084 0.15451 0.17575 0.237003 0.216924 0.660560 33.16178 -77.80818 11.80361 0.000034 Std. Error 0.18744 0.05943 0.07132 Mean dependent var S.D. devent var Akaike info criterion Schwarz criterion Hannah-Quin criter. Durbin-watson stat You decide to test the hypothesis I 0:8 1=0.5H0:31=0.5 Which test would you use? Perform the test and reach a conclusion. Q