(i) In part (i) of Computer Exercise CI 1.6, you were asked to estimate the accelerator model...

Question:

(i) In part (i) of Computer Exercise CI 1.6, you were asked to estimate the accelerator model for inventory investment. Test this equation for AR(1) serial correlation.
(ii) If you find evidence of serial correlation, reestimate the equation by Cochrane-Orcutt and compare the results.