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Px = Personal conusmption expenditures: durable good Py= personal consumption ex

ID: 3217584 • Letter: P

Question

Px = Personal conusmption expenditures: durable good
Py= personal consumption expenditures: non-durable goods
I = Real disposable personal income
R = 3 Year treasury constant maturity rate
C = Constant
Rdebt= real debt
Expect = expectations

I believe the equation will look something like Y = C - 9.6Px + .2I ..... but I'm not sure which terms to use, etc.
Also, once I have the sample regression function, how do I examine it in terms of coefficients, magnitude, errors, etc?

Eviews [Equation: MULTIVARIATE2 workfile: pROJECT2:UntitledN E File Edit object View Proc Quick Options Window Help View Proc object Print Name Freeze Estimate Forecast Stats Resids Dependent Variable: Y Method: Least Squares Date: 03/30/17 Time: 10:39 Sample (adjusted): 1999Q2 2016Q4 Included observations: 71 after adjustments Variable Coefficient Std. Error t-Statistic Prob. 314.2397 833.1017 0.377192 0.7073 -9.688003 4.439694 2.182133 0.0328 PX -0.459182 1.257665 0.365106 0.7162 0.165759 0.032991 5.024305 0.0000 2.022540 5.065437 0.399282 0.6910 RDEBT(-1)M(-1) 636.5169 206.7297 3.078981 0.003 EXPECT 2795216 0.755141 3.701583 0.0004 0.979660 Mean dependent var R-squared 1099.293 Adjusted R-squared 0.977754 S.D. dependent var 238 9711 S. E. of regression 35.64313 Akaike info criterion 10 07838 Sum squared resid 81307 69 Schwarz criterion 10.3014 Log likelihood 350.7824 Hannan-Quinn criter. 10.16709 F-statistic 513.7616 Durbin-Watson stat 083372 Prob (F-statistic) 0.000000

Explanation / Answer

ho: beta_i is not significant. h1: beta_i is significant

IF p-value for a coefficient is greater than alpha (0.05), i fail to reject ho and conclude that coefficient is not significant.

else IF p-value for a coefficient is less than alpha (0.05), i reject ho and conclude that coefficient is significant.

here, PX, I, RDEBT(-1)/(-1) and EXPECT are signfiacnt variables.

y = 14.2397*c - 9.688003*px - 0.459182*py + 0.165759*I + 2.022540*R - 626.5169*RDEBT(-1)/(-1) + 2.795216*EXPECT