Subject: Introductory Econometrics I have no idea how to solve this question and I need explanation for the answer.
Explain each step in deriving the proof;
=
Let
……………………………………………………..………………………..………… i
in equation (i), can as well be expressed as;
…………………………………………………………………………………….…………………… ii
And further simplifying;
………………………………………………………………………………………………. iii
Note that;
Substituting (iii) into (i)
………………………………………………………………….………………………… iv
in (iv) can as well be expressed as;
= ……………………………………………….………………………..…………………………… v
Substituting (iv) into (v) and further simplifying;
……………………………………….……………………………………………………… vi
……………………………………………………………………………………………….. vii
Multiplying both numerator and denominator by ;
……………………………………………………………………..………………………….. viii
Simplifying;
……………………………………………………………………………….. viii
……………………………………………………………………………….. ix