You collect unadjusted, quarterly data on nominal wages, unemployment, and prices in
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the United States from 1940 through 2011 from the United States Bureau of Labor and Statistics.
Wages are the median wage in the United States in each quarter, the unemployment rate is
reported for each quarter, and price is an index based on the Consumer Price Index in each quarter.
After examining your model, you believe that you have no endogeneity problem withyour independent variables. How can you test for the possibility of AR(2) serial correlation?What changes can you make to your estimation to correct for any potential serial correlation?
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