* Reference: Chapter 11 of * Jeffrey M. Wooldridge, Introductory Econometrics: A Modern Approach, * South-Western College Publishing, 2000. SAMPLE 1 41 READ (EARNS.shd) year wkearns wkhours outphr hrwage lhrwage loutphr t & ghrwage goutphr ghrwge_1 goutph_1 goutph_2 lwkhours SET MISSVALU=-999 SET SKIPMISS * Example 11.7 * Equation (11.28), p. 365. * Generate a time trend GENR t=TIME(0) OLS lhrwage loutphr t / LOGLOG * Obtain a 95% confidence interval. CONFID loutphr * Linearly detrend log(hrwage) - see page 337. OLS lhrwage t / RESID=yld * Estimate an AR(1) model for the detrended series yld. OLS yld yld(1.1) * Linearly detrend log(outphr) OLS loutphr t / RESID=yld OLS yld yld(1.1) * Equation (11.29), p. 366. * Generate first differences GENR ghrwage = lhrwage - LAG(lhrwage) GENR goutphr = loutphr - LAG(loutphr) * Adjust the sample period for undefined initial observations SAMPLE 2 41 OLS ghrwage goutphr STOP