Econometrics

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Rescaling and the Sign of an Estimate

EMETRC-6LFRGE

Jerry's neighbor, Cosmo, says that rescaling the $x$ variable in a Simple Linear Model regression can cause a slope term estimate to change signs (from positive to negative, or vice versa).

Jerry thinks it's another one of Cosmo's crazy ideas, and that rescaling cannot change the sign of the slope estimate.

Who is correct?

A

Jerry

B

Cosmo