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  3. consider the following regression results of b for

Consider the following regression results of B for time series data. The dependent variable is the...

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Advance Math

Consider the following regression results of B for time seriesdata. The dependent variable is the log of real consumption and theregressors are all lagged by one period. The coefficients areestimated by OLS method. *, **, and *** indicate that thecoefficients are significant at the 10%, 5%, and 1% level,respectively. The F- test in the last row tests the jointhypothesis that all the coefficients except the constant are zeroand their p-values are provided in the table. The empty space meansthat the variables are not included in the regression. (4)3.1213*** 3.8876*** (1) Constant log(Real Income) 0.8683* InterestRate Inflation Rate log(Stock Price) F-test 0.082 (2) (3) 3.3962***3.8115*** 0.6289*** 0.6341*** -0.2680** -0.2402** 0.5233 0.5230-0.2504*** 0.6237 0.4775 0.064 0.095 0.044 (a) Why do we have toinclude lagg values of regressors in the equation? (b) Compare theresults of equations (1) and (2) and make any comments. (c) Comparethe results of equations (2) and (3) and make any comments. (d)Compare the results of equations (3) and (4) and make anycomments.

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