---------***I NEED STATA COMMANDS FOR LOG FILE [MANDATORY]***---------- Thank yo
ID: 3317060 • Letter: #
Question
---------***I NEED STATA COMMANDS FOR LOG FILE [MANDATORY]***----------
Thank you
country infl mgrowth ygrowth Brazil 81.8 84.4 4.9 Argentina 70 69.5 2.5 Peru 53.5 52.8 3.3 Uruguay 40.7 39 1.9 Bolivia 37.1 39.1 2.6 Chile 34.3 40.2 4.1 Turkey 31.3 34 4.5 Israel 28.5 32.3 5.5 Ghana 26.9 26.3 3.3 Sierra Leone 24.8 22.7 1.6 Indonesia 22.8 30.3 6 Mexico 21.2 25.1 4.5 Ecuador 19.5 24.4 4 Iceland 18.6 19.4 3.9 Tanzania 18.2 19.6 2.9 Colombia 17.4 21.2 4.2 Venezuela 16.5 18 2.4 Nigeria 15.7 19 1.9 Jamaica 14.3 17.7 1.9 Iran 13 17.9 4.7 Costa Rica 12.5 16.5 4.3 Paraguay 11.9 16.8 4.4 Madagascar 11.7 13.1 1.8 Algeria 11 15.5 4 Kenya 11 13.8 4.1 Haiti 10.7 12.2 4.8 Dominican Rep. 10.6 14.4 5.2 Greece 10.4 14.1 3.7 Portugal 10.3 11.5 4.2 Philippines 9.9 13.3 3.9 Burundi 9.6 10.3 1.7 Syria 9.3 15 5.8 South Korea 9.1 17.7 7.5 Egypt 9.1 12.9 4.9 El Salvador 9 9.5 3 Rwanda 8.9 9.7 3.3 South Africa 8.8 11.7 3.3 Gambia 8.6 12 4.3 Honduras 8.6 12.2 3.5 Guatemala 8.5 11.9 3.9 Spain 8.2 12.2 4.1 Nepal 8.1 14.8 4 Mauritius 8 11.6 4.4 Sri Lanka 8 11.6 3.9 Trinidad 7.8 9.1 3.4 India 7.7 11.6 4.8 Italy 7.6 10 3 Pakistan 7.6 11.5 5.6 Cameroon 7.3 8.6 3.5 Fiji 7.1 10 3.4 Barbados 7 9.6 4.3 Jordan 7 9.2 5.2 New Zealand 6.9 6.3 2.4 Ireland 6.8 10.1 4.8 Ivory Coast 6.6 9.3 3.9 United Kingdom 6.5 6.1 2.4 Gabon 6.2 9.7 4.9 Senegal 6.1 8.5 2.7 Togo 6 10.3 1.8 Ethiopia 6 8.3 2.9 Finland 6 8.8 3.3 Denmark 5.7 6.5 2.6 Sweden 5.6 6.5 2.5 Australia 5.6 8.6 3.7 Norway 5.5 6.1 3.5 Morocco 5.3 10.3 4.9 France 5.2 5.2 3.3 Niger 5.1 6.3 1.3 Thailand 5.1 10.5 6.7 Canada 4.5 7.5 3.7 Cyprus 4.4 9.8 5.4 United States 4.4 7.4 3.5 Japan 4.3 10.1 5 Belgium 4.1 3.7 3.1 Netherlands 4 5.2 3.2 Luxembourg 3.9 9.3 4.2 Austria 3.8 5.8 3.3 Switzerland 3.4 4.1 2.2 Malaysia 3.3 8.7 6.5 Germany 3.2 6.5 2.2 Singapore 3.2 9.8 8.1 Question 5 [15 points]. In your macrocconomics class you learned about the quantity theory of money (QTM). This idea has been around for several hundred years actually. It states a simple relationship between money and prices. First, changes in the quantity of money have a positive effect on the general price level Second, as an empirical matter, movements in the money stock should account for the major long run changes in the price level QTM has been written as the following relationship where M is the money supply, V is the velocity of money, P is the price level and Y is real output (income) Dividing both side by Y gives If V and Y are constant, then changes in M result in equal changes in P. However, this version of the QTM is too strict to hold in the real world. A less restrictive version can be written in terms of % changes Therefore, changes in money supply, income and velocity cause changes in the price level. Suppose we treat velocity of money as an unobserved error term. We can then express the QTM by the regression Notc that infli is simply AV cotry i, mgrowth is and ygrowthi Fally, u represcnts ut representS for country 2 If the QTM holds, then A-1 and 2--1. Use the money. csv data to test this proposition. The data contains the following variables The data contains the following variables » infli - inflation of country i . mgrowthi - money growth of country i o ygrowth; -output growth of country i Questions (a) Estimate regression (1) and report the results. Are the coefficient (point) estimates consistent with the QTM? (b) Test individually the hypotheses corresponding to the QTM; that is, individually test that -1 and 21. Are test results consistent with the QTM? In Stata, try using both test and ttest commands, and compare the results (c) Evaluate the join hypothesis 1, 21 using an F-test. Are your results consistent with the the QTM? Does the joint test give the same result as the individual tests? Careful, 'calculating' something here means actually computing or estimating a value. Not the same as 'creating' a variable from other variables in the data.Explanation / Answer
First of all copy the data and post it on the data editor on the STATA .
a) Now use command "reg inf li mgowthiygrowthi"
Now check the signs of the coefficients of the variables mgrowth and ygrowth. If the sign for mgrowth and ygrowth is positive then point estimates are consistent with QTM.
b) R2 tells us the total variation in inf li explained by the variation in mgrowth and ygrowth.
c) Check for the following null hypothesis
First;
H0 =beta1 =1
H1: beta1!=1
Calculate t = (beta1(hat) -1)/SE(beta1(hat))
If t calculated above is greater than the critical t-value at given level of degrees of freedom and significance level . Then we reject the null hypothesis else not.
Second we will check for
H0: beta2 = -1
H1: beta 2!=0
If the t-value is greater than t- critical then we reject the null else we do not.
d) Now bhek
H0: beta1 = beta2 = 1 (joint significance)
H1 : beta1= beta2 != 1
Check the F- value given in the results from question 1 . If the F-value is ver high then reject the null else do reject the null.
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