In my text book is says:
Regress each of $y_t, x_{t1}$, and $x_{t2}$ on a constant and the time trend $t$ and save the residuals…
What do they mean regress each on a constant? What constant specifically? This is coming from a section in the textbook (introductory econometrics to be exact) dealing with detrending a time series.
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Best Answer
They mean the constant term in the model, i.e. they assume the model
$$y_t = alpha t + beta$$
The $beta$ term is the constant they refer to. They ask you to estimate $alpha$ and $beta$, and save the regression residuals.
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