of this family is white. 4. [Phillips curve. Let\'s consider the following relat

Question

of this family is white. 4. [Phillips curve. Let's consider the following relationship between unemployment (unemploy) and inflation (inf) you can find the definition of variables the ink PHILLIPS DES and the dataset can be downloaded from the following webpage DATASET (PHILLIPS data) aD student: Freddy Rojas Cama Homework 2-ECO 322 Rutgers University (a) Do the following using STATA commands i. Plot in a same graph the inflation, unemployment and the population regression ii. Calculate the mean, ii. Calculate the mean or average of inflation conditiona in values of inflation iv. Evaluate the null hypothesis that 0 in statistical terms. line. Hint: help scatter flation and unemployment in this dataset. hint: help summarize greater than 10. hint: help summarize standard deviation, maximum and minimum values of in (b) Run the model specified in (2) and do the following: i. Report diagnosis and treatmenin the presence of non-spherical disturbances. Hint: it is a time series data ii. How do you interpret the OLS estimate of economic and statistical terns? iii. Construct a 95% confidence interval for the prediction or fitted values of the iv. Evaluate the inclusion of a lag of inflation in (2). Hint: significance test, R2 Report your final model.

Explanation / Answer

There is no data in the question , however the stata commands for the first 4 subparts are as shown below

a

i)

ii)

summarise inflation

summarise unemployement

iii)

summarise inflation if inflation > 10

iv)

Run the command

regress inflation unemployment

This would result in the regression output . Check the p value of B1 , if the p value is less than 0.05 , then we can say that the B1 is significant , else we conclude that the value B1 is not significant

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