In this edition, we have sought to fill what certain readers saw as gaps in the earlier editions. More specifically, this edition contains five additions:
1. An extension of Appendix B to Chapter 1, which provides a review of basic statistical concepts.
2. An expanded discussion of the measurement of the explanatory power of the regression model.
3. A discussion of autocorrelation problems in the presence of a lagged dependent variable.
4. A discussion of the concept of stability.
5. An expanded treatment of heteroscedasticity that includes the Goldfels-Quandt test.