| Take Home Midterm for Statistical Decision Making
The following model should be used for projecting the GDP by expenditure data to 2020 for your country: 1. Production Function: |
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| Incremental Capital-Output Ratio (ICOR) = 1/b
Growth Rate of GDP = If b<0 use ln(Y) = a + b year to estimate Ry. 2. Consumption Function: C = a + b Y If a<0 or b>1 or the t-value for b is not > 2 (absolute value) use the average propensity to consume from 2010 to 2014 instead of the equation. |
3. Import Function: M = a + b Y
If a<0 or b>1 or the t-value for b is not > 2 (absolute value) use the average propensity to import from 2010 to 2014 instead of the equation.
4. Export Function: ln(X) = a + b year
Your report should be printed in a WORD document. It should follow the format shown for Australia which is below.
Please observe the decimal place conventions for each table as demonstrated below.
Name___________Campano______________Country Australia
1. Production Function: 674526.4 + 0.098021
(t=116.9) (t=30.11) R sq = .986
ICOR = 1/.098021 = 10.20188,
I/Y = average share from 2010 to 2014= 31.22853
Growth rate of Y = 31.22853/10.20188=3.061055
2. Consumption Function: C= -41927.2 + 0.621904 Y
(t=-4.15) (t=50.19) R sq = .995
Wrong sign for “a” coefficient: C=.5764805Y substituted (average Propensity to consume from 2010 to 2014)
3. Import Function: M = -244987 + 0.536144Y
(t=-10.3) (t=18.5) R sq = .963
Wrong sign for “a” coefficient: M=.2729894Y substituted (average Propensity to import from 2010 to 2014)
4. Export Function: lnX =-51.9519 + 0031866 Year
(t=-12.4) (t = 15.3)
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