Problem Set 3 2011

Problem Set 3 2011 - Problem Set 3 Due(8 Econometrics I...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Problem Set 3 Econometrics I Due 2/17/2011 Resource Economics 702 (8) 1. The data set money. xlsx on the course website contains time series data for the following variables: M2 = seasonally adjusted M2 monetary aggregate measured in billions of dollars; GDP = seasonally adjusted annual real GDP measured in billions of chained 1996 dollars; interest = discount rate (%). a. What signs do you expect for the parameters of the model: b. Estimate the model and interpret the estimates. c. Are the estimated effects of GDP and interest rates statistically significant? Explain clearly your conclusions. d. Determine the elasticity of demand for money with respect to income ( GDP ). Determine the elasticity of demand with respect to the interest rate as well. Provide an interpretation for each elasticity. e. Determine the estimated covariance matrix for the OLS estimators
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/08/2011 for the course ECON 702 taught by Professor Staff during the Spring '08 term at UMass (Amherst).

Ask a homework question - tutors are online