Estimate the koyck model

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Reference no: EM13891661

1. Table gives the business expenditures for new plant equipment of public utilities and the gross national product X, both in billions of dollars, for the United States from 1960 to 1979.

(a) Estimate the Koyck model [i.e., Eq. (8.10)]. (b) What are the values of A^ and a^?

Table Business Expenditures for New Plant Equipment of Public Utilities and the Gross National Product: United States, 1960-1979 (in Billions of Dollars)

Year

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

Y

5.2

5.0

4.9

5.0

5.5

6.3

7.4

8.7

10.2

11.6

X

506.0

523.3

563.8

594.7

635.7

688.1

753.0

796.3

868.5

935.5

Year

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

Y

13.1

15.3

17.0

18.7

20.6

20.1

22.3

25.8

29.5

33.2

X

982.4

1063.4

1171.1

1306.6

1412.9

1528.8

1702.2

1899.5

2127.6

2368.5

SourceEconomic Report of the President, U.S. Government Printing Office, Washington, DC, 1980, pp. 203, 255.

Reference no: EM13891661

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