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January 05, 2011

Homework 1

Economics 607
Monetary Theory and Policy
Fall 2011
Homework 1
Due Tuesday, January 11

1. Estimate a four lag St. Louis equation using RATS and data from FRED on output, government expenditures, and money (average the monthly money stock data to covert it to quarterly data). Examine three specifications of the model (i) a difference model of output on current and lagged values of government spending and money, (ii) a log-difference model of output on current and lagged values of government spending and money, and (iii) a log-difference model of output on current and lagged values of government spending, money, and lagged values of output. What do the results imply?

2. Duplicate the results shown in equations (4) and (5) and the associated F-tests discussed in the text in Barro's (1976) paper on the reading list (this is the first Barro article we discussed).

Posted by on January 05, 2011 at 10:46 AM in Homework, Winter 2011 |

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