Consider the Following Distributed Lag Model $Y _ { t } = \beta _ { 0 } + \beta _ { 1 } X _ { t } + \beta _ { 2 } X _ { t - 1 } + u _ { t }$

question 35

Essay

Consider the following distributed lag model $Y _ { t } = \beta _ { 0 } + \beta _ { 1 } X _ { t } + \beta _ { 2 } X _ { t - 1 } + u _ { t }$ , where $u _ { t } = \phi _ { 1 } u _ { t - 1 } + \tilde { u } _ { t } , \tilde { u } _ { t }$ is serially uncorrelated, and $X$ is strictly exogenous. (a)How many parameters are there to be estimated between the two equations?

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Definitions:

Phosgene

A toxic chemical compound with the formula COCl2, used in the production of organic chemical compounds as a reagent or intermediate.

Compound

A chemical substance made up of two or more different elements that are chemically bonded together in a fixed ratio.

Dimethylheptanoic Acid

denotes a hypothetical organic compound, potentially misnamed, suggesting a heptanoic acid derivative substituted with two methyl groups.

γ-hydroxypentanoic Acid

An organic compound characterized by a five-carbon chain with a hydroxyl group attached to the third carbon and a carboxylic acid group at the end.