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Tuesday, January 17, 2012

Are Those Conditions Necessary, or Just Sufficient?

We all know the difference between conditions that are necessary, and ones that are sufficient, for some result to hold. However, it's not uncommon for us to lose track of which is which when it comes to certain econometric results. I'm going to focus on just one example of this, and in doing so I'll try and clear up a common misconception.