What is the interpretation of a time-varying θ? Note that in panel (a), θ seems to track the interest rate. Does this make sense? Why or why not?  Would you accept or reject the null hypothesis that...

What is the interpretation of a time-varying θ? Note that in panel (a), θ seems to track the interest rate. Does this make sense? Why or why not?

 Would you accept or reject the null hypothesis that a(t) is constant, that is, that the slope of the linear function a(t) is zero? Justify your answer