03 Jun Question __________________________________________ Objective and Instructions:The main objective of this
Question
__________________________________________
Objective and Instructions:The main objective of this assignment is to evaluate your understanding of the course objectives: quantifying economic relationships, interpreting quantified relationships, and formulating appropriate policy recommendations. To this end, you are being provided with data on US trade (exports) with 175 countries during the years 2007 and 2008 (Worksheet-1 in the excel file) and descriptions of the corresponding variables (Worksheet-2). Read the background presented below and answer the four questions that follow. Each question carries 10 points. The clarity and organization of your answers will earn you additional 10 points.
The problem: the classical theory of international trade shows that higher purchasing power, and the market size of a given country the higher is the number of firms (companies) interested to do business in the given country. The purchasing power and market size of the trading partner countries are thus expected to have positive effect on the volume of US exports to the respective countries. On the contrary, greater geographic distance (indicating higher shipping costs), higher levels of corruption, and greater cost of living (as measured by the level of inflation) in the given country are expected to have a negative effect on the total volume of trade with the given country. Empirical studies of the role of immigrants in international trade also show by bridging cultural differences, immigrants increase the volume of bilateral trade flows between their home and host countries. Two additional dummy variables, D1 taking value of 1 if the reference period is 2007 and 0 otherwise, and D2 taking a value of 1 if the given home country is an OECD member and 0, otherwise are also included. The year dummy is included to control for potential year to year fluctuation of trade flow values. The OECD membership dummy is included to account for the potential effect of the similarity in the economic development status of the countries. Given that the data refers to US export with the rest of the world, it is expected that given their close ties resemblance in their economic development with USA, compared to countries that are no OECD members, countries that are members to OECD are expected to trade more with USA.
The Econometric Model:To empirically assess these assertions, I want you to estimate the following log-linear regression model using the data provided to you (Excel Data, Course Page).
1. Provide an appropriately formatted descriptive statistics table of the variables (in original units) in the data and a brief discussion of the descriptive stats so that readers can have a better understanding the general characteristics of US trade flows and geographic as well as economic conditions its trading partners. Be brief and to the point. [This question is designed to assess your knowledge of computing descriptive stats and your ability to make use of them.]
2. Estimate the model, present your results and the corresponding statistics (appropriately formatted and labeled) in the form of a table while also indicating the level of significance of each variable included in the model. [This question is designed to assess your ability quantify economic relationships based on real world data.]
3. Discuss the overall performance of the model and interpret the coefficient estimates accordingly. [This question is designed to assess your ability to interpret quantified relationships, and the appropriateness of specified relationships.]
4. In order to increase US economic growth, the president and congress agree on the importance of increasing US exports. Given the results you reported above, what policy advice would you suggest (on what they should do) for policy makes interested to increase US exports. [This question is designed to assess your ability to formulate policy recommendations based quantified economic relationships.]
Attachments
Homework-7-Data.xlsx (38.16 KB) Raw Preview for Homework-7-Data.xlsx
Tutorials for this Question
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.