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Consider the following model:
Y*i= β0Xt β1eUt
a) Using the stock adjustment model, estimate the short-run and long-run elasticities
b) Comment on the following processes : i) Autoregressive ii) Distributed lag
c) How is a fixed effect model (FEM) different from an error components model (ECM)?
d) How do we test for "ARCH Effects"?
e) Briefly comment on two information criteria for model selection
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