ECO601 Business Econometrics Assignment No 01 Fall 2019 Solution & Discussion Due Date: 21-11-2019

[+ M.Tariq Malik]

ECO601 Business Econometrics Assignment No 01 Fall 2019 Solution & Discussion Due Date: 21-11-2019

ECO601 BUSINESS ECONOMETRICS Assignment 1 Solution/Discussion Fall 2019

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SEMESTER FALL 2019

BUSINESS ECONOMETRICS (ECO601)  

ASSIGNMENT

DUE DATE: 21^ST NOVEMBER, 2019

MARKS: 10

 

The Case:

Expansionary monetary policy didn’t play its role effectively in the increase in exports as it was expected to be done similar in 2013-2014.  The present government of Pakistan is trying its best to increase the exports and reduce the imports. For this purpose, government uses the tight monetary policy. Government increases the interest rate and also tries to bring the exchange rate at adjustable position. Remittances also play vital role in decreasing current account deficit. Remittances and Exports play role to increase the economic growth of the country. In this assignment, Growth rate is taken as a function of exports, remittances, and Capital .In order to find out the effect of these variables on Growth rate, following model has been proposed for estimation:

Growth rate = β₀ + β₁ (Exports) + β₂ (Remittances) + β₃ (Capital) +    ………….  (1)

Model (1) can also be written as:

   ……………  (2) 

In model (2):

  : Real GDP Growth Rate (Percent)

  : Exports of Principal Commodities (Million Dollars)

  : Workers’ Remittances (Million Dollars) 

 

: Gross Fixed Capital Formation (Million Rupees)

 

   : Intercept term

 

    : Error term

 

: Slope Coefficients.

 

Data on these variables is taken from 1995 to 2015. Data has been taken from “State bank of Pakistan website”.

 

Years	Economic Growth (GDP)	Exports (E)	Workers’ Remittances (R)	Gross Fixed Capital Formation (K)
1995	4.1	8,137.2	1,866.10	317,845
1996	6.6	8,707.1	1,461.17	368,424
1997	1.7	8,320.3	1,409.47	396,859
1998	3.5	8,627.7	1,489.55	402,845
1999	4.2	7,779.3	1,060.19	409,357
2000	3.9	8,568.6	983.73	607,410
2001	2.0	9,201.6	1,086.57	659,325
2002	3.1	9,134.6	2,389.05	680,373
2003	4.7	11,160.2	4,236.85	736,433
2004	7.5	12,313.3	3,871.58	844,836
2005	9.0	14,391.1	4,168.79	1,134,942
2006	5.8	16,451.2	4,600.12	1,711,522
2007	5.54	16,976.2	5,493.65	1,960,232
2008	4.99	19,052.3	6,451.24	2,066,941
2009	0.36	17,688.0	7,811.43	2,263,636
2010	2.58	19,290.0	8,905.90	2,504,231
2011	3.62	24,810.4	11,200.97	2,288,325
2012	3.84	23,624.3	13,186.62	2,701,458
2013	3.65	24,460.5	13,921.66	2,990,126
2014	4.03	25,109.6	15,837.71	3,354,999
2015	4.24	23,667.3	18,720.00	3,701,627

 

Requirements:  

Using above information, estimate the multiple regression model by using Microsoft Excel Data Analysis Tool and find out as well as interpret coefficients and R square value:

1. Coefficients (β₀, β_1, β_2, β₃)
2. R square
3. Adjusted R square
4. Calculate F-value                        

Marks: (4 + 2 + 2 +2)

Note:           You   are     required      to       give           interpretation       of       required regression/estimation results in tabular form given below:

Dependent Variable:  Growth Rate (

R square value
R square interpretation
Adjusted R square value
F-value

 

IMPORTANT:

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[+ M.Tariq Malik]

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[Mr khan]

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[Mr khan]

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[Mr khan]

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[furqan hamid]

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[Mr khan]

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[Mr khan]

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[Mr khan]

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