The impact of functional form over the normality assumption in the residuals

2 Comments / Econometrics /

A discussed solution in order to accomplish the normality assumption in regression models relates to the correct specification of a Data Generating Process (Rodríguez Revilla, 2014), the objective here is to demonstrate how functional form might influence the distribution of the residuals in a regression model using ordinary least squares technique. Let’s start with a […]

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Discussing the Importance of Stationary Residuals in Time Series

7 Comments / Econometrics /

A traditional approach of analyzing the residuals in regression models can be identified over the Classical Assumptions in Linear Models (Rodríguez Revilla, 2014), which primarily involves the residuals in aspects as homoscedasticity, no serial correlation (or auto-correlation), no endogeneity, correct specification (this one includes no omitted variables, no redundant variables, and correct functional form) and

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The evil in the heart of the good: Unfolding the role of remittances in the escalating trade deficit figures of the MENA region.

1 Comment / Development-related, General economics, Public policy /

The MENA region is ranked first in terms of remittance receipts (3.83% of GDP) worldwide, it has also the highest non-oil trade deficit among other developing regions (World Bank, 2018). This study uses panel data from 11 Labor-abundant MENA countries (main destination of remittance receipts) to examine the trade balance effect of remittances. We postulate

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The interaction between monetary and macroprudential policies

1 Comment / General economics /

There is an increasing concern among policy makers and economists about macro prudential policies that aim to stabilize the economy and alleviate financial distortions through affecting output and inflation levels . This paper by Claessens, and Valencia, (2013) at VOX tries to study the possible interactions between monetary and macro prudential policies. In addition, it

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