The McGraw-Hill Series Economics essentials of economics brue, McConnell, and Flynn Essentials of Economics

indecisive zone,
one cannot conclude that (first-order) autocorrelation does or does not
(12.6.10)
d
≈
2(1
− ˆ
ρ
)
436
Part Two
Relaxing the Assumptions of the Classical Model
TABLE 12.6
Durbin–Watson 
d
Test: Decision Rules
Null Hypothesis
Decision
If
No positive autocorrelation
Reject
0 
<
d
<
d
L
No positive autocorrelation
No decision
d
L
≤
d
≤
d
U
No negative correlation
Reject
4 
−
d
L
<
d
<
4
No negative correlation
No decision
4 
−
d
U
≤
d
≤
4 
−
d
L
No autocorrelation, positive or negative
Do not reject
d
U
<
d
<
4 
−
d
U
guj75772_ch12.qxd 14/08/2008 10:40 AM Page 436

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Chapter 12
Autocorrelation: What Happens If the Error Terms Are Correlated?
437
exist. To solve this problem, several authors have proposed modifications of the 
d
test but
they are rather involved and beyond the scope of this book.
25
In many situations, however,
it has been found that the upper limit 
d
U
is approximately the true significance limit and
therefore in case 
d
lies in the indecisive zone, one can use the following 
modified