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Economic and Business Forecasting: Analyzing and Interpreting Econometric Results
book

Economic and Business Forecasting: Analyzing and Interpreting Econometric Results

by John Silvia, Azhar Iqbal, Kaylyn Swankoski, Sarah Watt, Sam Bullard
March 2014
Beginner to intermediate content levelBeginner to intermediate
400 pages
11h 35m
English
Wiley
Content preview from Economic and Business Forecasting: Analyzing and Interpreting Econometric Results

CHAPTER 8

Characterizing a Relationship Using SAS

A question that is essential to analysts in the economic and financial world is: To what extent are certain variables related to each other? This chapter provides methods for using SAS software to determine the statistical relationship between economic and financial variables and to interpret the results. First we share useful tips for an applied time series analysis and then we examine how to estimate the statistical relationship between two (or more) variables.

USEFUL TIPS FOR AN APPLIED TIME SERIES ANALYSIS

Helpful hints are the reliable servant of any good work. An analyst needs to be familiar with a few key guidelines for applied research. The guidelines include using economic and financial theories as a benchmark and testing the theory with econometric techniques by employing time series data (or cross-section/panel data).1 Most applied econometric analysis is now done by statistical software, which produces results quickly. Such speed can be a trap, however, because the software does not care what kind of data is inputted and whether it is the best basis for the statistical results.

For example, using any statistical software, an analyst can produce correlation coefficients between the population in Gambia and the gross domestic product (GDP) of the United States.2 The correlation coefficient may be statistically significant, yet any correlation is likely to reflect a third factor: a deterministic time trend (i.e., an upward ...

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Publisher Resources

ISBN: 9781118497098Purchase bookDownloads