Enter Y, X₁, X₂, ... data side-by-side. Add/remove variables dynamically. Matrix algebra OLS estimation.
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In econometrics, we are often interested in testing whether specific relationships hold between estimated coefficients. When such a relationship can be expressed as a linear equation in the coefficients, it is called a linear restriction. A classic example arises from the Cobb-Douglas production function, where economists want to know whether
Theories of Economic Growth Theories of economic growth are the frameworks economists use to explain how and why national income, output, and productive capacity expand over time. They try to identify the key drivers behind a rising standard of living—such as capital accumulation, labor, technology, and institutions—and to show how
Macroeconomics studies how an entire economy behaves — how total output, the general price level, employment, and interest rates are determined. To understand these outcomes, economists typically divide the economy into three interconnected markets: the goods market, the money market, and the labour market. The famous IS-LM model is essentially
Why does an economy sometimes get stuck producing less than it could, with willing workers and idle machines sitting unused? Classical economists assumed markets would sort this out through prices and wages. Keynes argued something more powerful: output is driven by aggregate demand, and the economy can settle into equilibrium
Introduction: Multiple Linear Regression Using Matrix The matrix approach to regression becomes especially powerful once we move beyond a single explanatory variable. It gives us numerical estimates of our multiple linear regression parameters more efficiently. In this post, we estimate a demand function using matrix algebra, where quantity demanded ()
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