The principal aim of this paper is to demonstrate how the coordinate-free methods of linear statistical models may be adapted to the analysis of econometric models, and to explain why such methods are useful for teaching purposes. The application of coordinate-free methods to linear statistical models cast in Euclidean space was first introduced by Kruskal(1961). Later, the methodology was exte...

Conducti ng monetary policy is a difficult business. It's easy enough to set a policy goal such as price stability or low and stable inflation , but because monetary policy affects the economy with a lag, achieving those goals requires an ability to peer into the future. A change in the money supply or interest rates today won't affect inflation for months, or even years, down the road. Consequ...

INTRODUCTION Measurement errors and questionnaire effects in survey data can have substantial impact on estimates of statistical relationships. Although the customer satisfaction literature contains some discussion of scaling issues (Westbrook and Oliver 1981), statistical models of customer satisfaction have not explicitly recognized measurement issues. This paper enhances the traditional mode...

In this paper, we investigate whether the theoretical default probability measures calculated from Merton’s (1974) structural credit risk model can provide a better way to explain and predict credit rating than traditional statistical models. The empirical results suggest that Merton’s theoretical default measure is not a sufficient statistic of equity market information concerning credit quali...