isomorphismes

notstatschat:

1. As Dan Davies observed (from memory) “The Great Depression really happened; it wasn’t just an unusually inaccurate observation of an underlying 4% return on equities”

2. Why do we assume errors have zero mean?  …the mean of the residuals is not identifiable separately from the intercept, and we just choose the parametrization that has mean-zero residuals. In that situation it’s not an assumption and couldn’t be falsified empirically.