Assumptions for unbiasedness o Still assume a model that is linear in parameters:y-Bo+ Bx+...+ Bkxuk+ Still need to make a zero conditional mean assumption: E(uX=0, t=1, 2,...,n e Note that this implies the error term in any given period is uncorrelated with the explanatory variables in all time periods Economics 20- Prof anderson 5Economics 20 - Prof. Anderson 5 Assumptions for Unbiasedness Still assume a model that is linear in parameters: yt = b0 + b1 xt1 + . . .+ bk xtk + ut Still need to make a zero conditional mean assumption: E(ut |X) = 0, t = 1, 2, …, n Note that this implies the error term in any given period is uncorrelated with the explanatory variables in all time periods