E-views, Econometrics

Assignment Help:

The following table gives data on the Consumer Price Index (CPI) and the Standard & Poor (S&P)
company''s index of 500 common stock prices.
Year CPI Index S&P 500 Index
1978 65.2 96.02
1979 72.6 103.01
1980 82.4 118.78
1981 90.9 128.05
1982 96.5 119.71
1983 99.6 160.41
1984 103.9 160.46
1985 107.9 186.84
1986 109.6 236.34
1987 113.6 286.83
1988 118.3 265.79
1989 124.0 322.84
Source: Economic Report of the President, 1990
A. Import the above data into E-Views. Plot the data on a scattergram with the S&P index on the
vertical axis and CPI on the horizontal axis. This is the second item on your printout for this
homework. Is this data time series, cross sectional, or pooled? Explain!
B. What can you say about the relationship between the two indexes?
C. Consider the following regression model:
Equation 1: (S&P)t = ?0 + ?1CPIt + ?t
(i) Using the data above, construct a table like the one shown in section 2.1.3 on page 39 in
Studenmund and use your calculations to manually compute the regression coefficients
in Equation 1 above (Hint: follow the method described in section 2.1.3).
(ii) Use OLS in E-views to estimate Equation 1 with the above data. Your E-Views output is
the third item on your printout for this homework. Are the results the E-views reports
different from the ones you obtained through the manual computation? Interpret the
coefficient estimates.
(iii) Do the results obtained in part (ii) above make economic sense?
D. What is the R2 of the estimated regression equation (highlight this on your E-views output)?
Given the type of data you used to estimate equation (1) does the R2 indicate an excellent fit, a
good fit, or a bad fit? Explain!

Related Discussions:- E-views

Distributed lag model, how run ditributed lag model and how select lag leng...

how run ditributed lag model and how select lag length?

Utility function, Peter's utility function is u(x, y) = x + 2y where  x  is...

Peter's utility function is u(x, y) = x + 2y where  x  is the number of ounces of coffee and  y  is the quantity of sugar in grams.  Let unit prices be given by  P x = 6 cents,  P

Production function and general equilibrium, Production Functions, Labor Ma...

Production Functions, Labor Markets, and a Small Open Economy. In 2007, the Icelandic economy was in general equilibrium, the supply of labor was a positive function of the real

Least squares regression , The tab-delimited text file C359A1S1Q2.txt conta...

The tab-delimited text file C359A1S1Q2.txt contains daily prices for the South Korean Stock Exchange Index (KOSPI) from 4/7/2006 (observation 1) to 11/6/2010 (observation 977). Alt

T-ratio test, about t-ratio test under multicolinarity

about t-ratio test under multicolinarity

Primal and dual lp problems, As in the model solved initially, the followin...

As in the model solved initially, the following is the LP model Maximize Z = $42.13*(x 11 + x 12 + x 13 + x 14 ) + $38.47*(x 21 + x 22 + x 23 + x 24 ) + $27.87*(x 31 + x

Quantitative Analysis, How Has Quantitative Analysis Changed The Current Sc...

How Has Quantitative Analysis Changed The Current Scenario In The Management World Today?

Pigouvian, In the United States, a buyer of a new electric is eligible for ...

In the United States, a buyer of a new electric is eligible for a one-time federal income tax credit of up to $4,000. Show the effect of this tax credit graphically, assuming the $

Calculate the percentage and test the hypothesis, Consider an equation to e...

Consider an equation to explain salaries of CEOs in terms of annual firm sales, return on equity (ROE, in percent form), and return on the firm's stock (ROS, in percent form): L

Impulse Response function (IRF), My question is that when we use Impulse re...

My question is that when we use Impulse response function and how to use it. Is it used along with some other methodology. What is the meaning of graphs of IRF?

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd