![]() The below function represents the lag effect of a variable on other variables and its own lags as well Thus, the long and short run behavioral consequences of a variable on other variable bring the role of distributed lag model in the scenario. Not only macroeconomic variables, other variables such as loss or profit earned by a firm in a year can affect the brand image of an organization over the period.įor instance: effect of a profit making decision taken by an organization in a year may have influence on the profit and brand image of an organization in the time t along with future periods such as t + 1, t + 2 and so on. This change in a variable is not what reflects immediately, but it distributes over future periods. In an economy, change in any economic variables may bring change in another economic variables beyond the time. Auto regressive Distributed Lag Models (ARDL) model plays a vital role when comes a need to analyze a economic scenario. ![]()
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