I am having difficulty getting the conceptual point on this, can anyone help explain this a little better. “As long as none of the independent variables is a lagged value of the dependent variable (a value from the previous period)” Is this saying the independent variable cant have correlation with the dependent variable from a prior period, its probably simple, I am just missing something Any help would be appreciated. Thanks,
What does the rest of that sentence say? Anyway, it’s fine to calculate a regression model using an independent variable which is a lagged value of a dependent variable. Such a regression model is called an autoregressive model and it just means that there is “serial correlation”