Assumptions of the classical Linear Model (Clm) e So far, we know that given the Gauss Markov assumptions, OLS IS BLUE e In order to do classical hypothesis testing we need to add another assumption(beyond the Gauss-Markov assumptions) Assume that u is independent of x,x2…,xk and u is normally distributed with zero mean and variance 0: u- Normal(0, 02) Economics 20- Prof anderson