INTRODUCTION TO ECONOMETRICS II ECO 306 NOUN 122 We will mostly be concerned with first-order
autoregressive autocorrelation, often denoted AR (1). AR (1) appears to be the most common type of autocorrelation approximation. It is described as positive or negative
according to the sign of ρ.
Note that if ρ is 0, there is no autocorrelation occurrence. There are two major things that
will be discussed in this unit, which are
1. Test for the presence of serial correlation. Estimate the regression equation when the errors are serially correlated.
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