Applied Econometrics Exam #1
Due: Next class
Northeastern University College of Professional Studies
1. (20 points) Consider the following equation relating percent share of the vote that the
incumbent candidate gets in an
Analysis on Economic Development of ChinaThe Lewis Theory of
Course: CED 6080 Economic Growth and Development
Professor: Robert D. Pritchard, Ph.D.
Student: Taoran Zhang
In recent thirty years, China has made remarkable achieve
I do not think so. Usually for
>0 . As a result, Var ( ^ )
underestimated and so is the standard error of
^ . Since the errors have AR(1)
t = t1 +e t .
We could know Var ( ^ ) =
j x t x t+ j .
The heteroskedasticity would make t test and F test meaningless because the OLS
doesnt work in a situation of heteroskedasticity. So (ii) is a consequence of
Because heteroskedasticity violates homoskedasticity assumption in Gauss-
1. i. At time t, t-1, and t-2, the impact propensities respectively are -0.68, -0.25,
ii. The long-run propensity is -0.68-0.25+0.33=-0.6.
2. In my opinion, the marriage at the time t and the time t-1 may be same with
each other because they are
(1)We can take derivation of the equation and let it equal to zero. Then we could gain
-0.00000000000008advertising=1.25. So we can find the point is 1565000000000. As
result, we say that after this point, the advertising would have a negative effect o
Because of covariance stationarity, Cov ( x t +h , x t +h )=Var (x t +h ) depend on h not t,
then we could know sd ( x t +h )= (h0).
So we can know that
Corr ( x t , x t +h )=
Cov(x t , x t +h)
sd ( xt ) sd ( x t +h) 0 0 0
E ( y t )
I think private law of property could solve the pollution problem to a certain extent,
but requires different analysis for different situations. Based on the private law of
property, people could protect their property and gain the remedy for their los
(1) The slope means a negative relationship between the incexp and the pctshare. The
intercept of the equation means that if the incumbent candidate do not spent on
advertising, he would predicted to gain 51.6% share support of the vote in election.
Problem set 2
1. If the economy were at a steady-state unemployment rate with a separation rate of 0.04
per month and a job-finding rate of 0.15 per month, and the labor force was 200 million,
How many individuals would lose their jobs each month?