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| Teaching Since: | May 2017 |
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| Questions Answered: | 66690 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Use the data in OPENNESS.RAW for this exercise.
Because log( pcinc ) is insignificant in both (16.22) and the reduced form for open , drop it from the analysis. Estimate (16.22) by OLS and IV without log( pcinc ). Do any important conclusions change?
Still leaving log( pcinc ) out of the analysis, is land or log( land ) a better instrument for open ? ( Hint: Regress open on each of these separately and jointly.)
Now, return to (16.22). Add the dummy variable oil to the equation and treat it as exogenous. Estimate the equation by IV. Does being an oil producer have a ceteris paribus effect on inflation?
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