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- Interpretation of interaction term 1 answer
I am trying to interpret the following model:
y= growth rate
d= dummy high debt countries (=1 for high debt countries; =0 low debt countries)
The problem is on the interpretation of the interaction term.
For example, i want to interpret the impact of x*d on the dependent variable (y), what i say is :
"if the x increases by 1% then growth rate of high debt countries increases by (a2+a4)".
Is it correct to say increases or I have to say higher? In addition, should I refer that "if the x increases by 1% then growth rate of high debt countries increases by 0.03 more than low debt countries" or it does not need to refer "low debt countries"?