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Question 1:
a) Explain what is a VAR giving an example both in the form of an equation and matrix. Discuss its benefits and limitations.
b) How can we estimate a VAR involving equations having a contemporaneous feedback term?
c) Distinguish between variance decomposition and impulse response functions.
Question 2:
(a) What are the two types of non-stationarity that exist and show how one of them can be made stationary?
(b) How do we test for a unit root?
(c) What does it mean when two variables are cointegrated?
(d) Using the Engle-Granger approach show how parameters can be estimated in cointegrated systems.
Would you please advise me what would be the code in Eviews if I have first dependent variable in continuous data, second censor data and third discrete data in my system (structu
Consider the following equations designed to estimate a school's test scores (Test) and the school's dropout rate (Drop). Test i = B 0 + B 1 *Parent Ed i + B 2 *school quali
Why use auxiliary regression? What are the benefits of using it?
advantages and disadvantages
The town of Dusty View, Saskatchewan has only two residents - Justin and Sarah - and has a water supply shortage in the summer. The municipal water utility charges a break even pri
Given for a closed economy: C = $20 + 0.50Y D I = $40 G = $10 Y D = Y- T 0 T 0 = $5 Determine: (a) the equilibrium
Following the general methodology used by econometricians as explained in the session for week 1 (eight steps), explain how you would proceed to determine if a good complies with t
A brief summary of the procedure of maximum likelihood.
Derive marginal benefit of reducing principal balances
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