Your Textbook Modifies the Four Assumptions for the Multiple Regression $\left( \operatorname { cov } \left( u _ { i t } , u _ { i s } \mid X _ { i t } , X _ { i s } \right) = 0 \right.$

question 12

Essay

Your textbook modifies the four assumptions for the multiple regression model by adding a new assumption. This represents an extension of the cross-sectional data case, where errors are uncorrelated across entities. The new assumption requires the errors to be uncorrelated across time, conditional on the regressors as well $\left( \operatorname { cov } \left( u _ { i t } , u _ { i s } \mid X _ { i t } , X _ { i s } \right) = 0 \right.$ for $t \neq s$ . (a)Discuss why there might be correlation over time in the errors when you use U.S.state
panel data.Does this mean that you should not use OLS as an estimator?

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Definitions:

Derailed Managers Study

Research focusing on managers who were successful in their careers but eventually failed to meet organizational expectations due to various reasons like poor interpersonal skills or inability to adapt.

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The materials, funds, personnel, and other items necessary to carry out a project, task, or enterprise.

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The practice of relocating business processes or production to a foreign country to reduce costs.