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Level 21
· ◆◆◆◆ · ~13 min
Serial Correlation
Serial Correlation
"When this period's error remembers the last one, OLS still finds the right line — but its standard errors turn dangerously over-confident."
serial (auto) correlationAR(1) errors uₜ = ρuₜ₋₁ + eₜconsequences for standard errorsdetection and HAC/Newey–West fixes
A short lesson, then a quiz. ❤️×3 — a wrong answer costs a heart; finish with at least one left and the level is yours. Lose all three and you'll have to try again. Replay any time — XP and cleared levels are never lost.