In looking for the simple Keynesian multiplier, you regress the GNP on in-vestment and find that there

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In looking for the simple Keynesian multiplier, you regress the GNP on in-vestment and find that there is some relationship. Now, thinking that it cannot hurt much, you include the "irrelevant" variable "state and local taxes." To your surprise, the investment variable loses its significance. How can an irrelevant variable do this?
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Essentials of Econometrics

ISBN: 978-0073375847

4th edition

Authors: Damodar Gujarati, Dawn Porter

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