1. Describe how one can test for structural breaks using (i) the dummy variable method and...

1. Describe how one can test for structural breaks using (i) the dummy variable method and (ii) the Chow test.

Expert Solution

(1) dummy variable method

Let data on disposable income (X ) & saving ( Y) for a given period

Let we divide sample data in two periods

Rahul Sunny answered 8 months ago

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