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stata代写-ECON 7040

时间：2021-04-28

Project ECON 7040

Instructions

You must submit to Turnitin a final report for the project that contains all your answers,

including graphs and tables (when necessary). The report must contain a list of references

used in the analysis/discussion of results. There is no page limit. However, brevity and

clarity will be valued and excessively long and unclear reports will be penalized. Students

also submit (to Blackboard instead) their replication data and codes.

Part A: Income Accounting (5 marks)

In this section, you are asked to repeat the analysis in Hall and Jones (1999). As seen in

Lecture 5, the production function in country i is

Yi =Kαi (AiHi)1−α,

where Yi is output, Ki is capital, and Hi represents human capital. The importance of

capital in production is α. Hall and Jones assume that α = 1/3 for all countries. They also

assume that human capital is

Hi = eφ(Ei)Li, (1)

where Ei is years of schooling in country i, Li is labor, and φ(Ei) is a piecewise linear

function. In particular, φ(·) implies that in the first 4 years of school, each year yields a

return of 13.4%. In the next four years, each year yields a return of 10.1%, while beyond the

8th year of schooling each year returns 6.8%. The production function can be rearrange as

Ai =

yi

hi

(

Ki

Yi

) α

α−1

,

where yi and hi are per-worker output and human capital, respectively. Taking logs we

have

lnAi = lnyi− lnhi− α1−α ln

(

Ki

Yi

)

. (2)

1. The excel file “DATA_HALL_JONES_1999_QJE.xls” contains the original data in

Hall and Jones (1999). For each country, we have output per-worker (yi), capital to

GDP ratio (Ki/Yi), and years of schooling Ei. Your first job is to obtain, for each

country, a measure of lnhi. You will need to use equation (1) and the assumptions

about φ(·). Plot a graph with lnyi in the vertical axis and lnhi in the horizontal

1

axis. What can you say about the relationship between human capital per-worker and

output per-worker?

2. Now, use equation (2) to obtain a measure of countries’ productivity levels lnAi. Ex-

plain the meaning of this measure. Does lnAi vary too much across-countries? In

particular, what is the mean and the standard deviation of lnAi?

3. Plot a graph with lnyi in the horizontal axis and lnAi in the vertical axis. Is the

relationship between lnyi and lnAi weaker or stronger than the relationship between

lnyi and lnhi? Report both correlations.

4. Pick two developing countries (call them country B and C) and compare them to

Australia (call it country A). In particular, what are the ratios yB/yA and yC/yA.

Then what are the ratios of all the other components (Ai, KiYi , and hi). What is the

main source of income differences between countries B and C and Australia?

Part B: Macrohistory database (5 marks)

In this section, you are asked to use the Macrohistory database. These data have a much

smaller number of countries but a much larger number of years per country. First of all,

familiarize yourself with the dataset and variables. All the relevant information is here:

https://www.macrohistory.net/database/.

1. After familiarizing with the dataset, select a subgroup of variables that you consider

are relevant to understand the drivers of countries’ GDP per-capita. To make this

decision use the models we used in lectures as a guide. However, you are free to think

out of the box and look for relevant relationships we have missed so far.1

2. Provide descriptive statistics on your variables (mean, median, standard deviation).

Discuss how much variation overtime you observe within country. Also, discuss how

much variation across countries you observe for a given year.

3. Proceed to estimate the relationship between (log) GDP per-capita or GDP growth

(your choice) and the variables of interest that you selected. Start by estimating a

simple OLS regression with all the countries pooled together. Interpret the coefficients

of the regression and discuss econometric and economic issues behind the results. Can

you make sense of the results using any existing theory? Are your results consistent

with previous literature?

1Relevant topics that are being investigated, and that might be of interest for you are the role of public

debt, the role of international trade, and the role of financial markets development, among others.

2

4. Extend the previous analysis and estimate a panel fixed-effect regression to control for

countries’ unobserved heterogeneity that might shape the observed heterogeneity in

GDP per-capita (growth).2 How different are the results compared to 3)? Are your

results consistent with previous literature?

5. Using the econometric model in 4) investigate how the relationship between GDP per-

capita and your “X” variables have changed overtime. In particular, how different are

the results of the model when you restrict the sample before 1945 (regression using

sample 1870-1945) and after 1945 (regression using sample 1946-2016? Discuss your

results from an economic perspective, considering the major economic episodes during

each subperiod.

6. Finally, investigate how important is the sample of countries in determining your re-

sults. For example, do your results change substantially when excluding US or Aus-

tralia or Japan from the sample? Discuss potential explanations for your findings.

2These slides are a useful source to refresh your knowledge on OLS and panel fixed-effect regression

https://ssrc.indiana.edu/doc/wimdocs/2011-10-07_mcmanus_panel_slides.pdf. This is relevant to

understand and interpret your results.

3

学霸联盟

Instructions

You must submit to Turnitin a final report for the project that contains all your answers,

including graphs and tables (when necessary). The report must contain a list of references

used in the analysis/discussion of results. There is no page limit. However, brevity and

clarity will be valued and excessively long and unclear reports will be penalized. Students

also submit (to Blackboard instead) their replication data and codes.

Part A: Income Accounting (5 marks)

In this section, you are asked to repeat the analysis in Hall and Jones (1999). As seen in

Lecture 5, the production function in country i is

Yi =Kαi (AiHi)1−α,

where Yi is output, Ki is capital, and Hi represents human capital. The importance of

capital in production is α. Hall and Jones assume that α = 1/3 for all countries. They also

assume that human capital is

Hi = eφ(Ei)Li, (1)

where Ei is years of schooling in country i, Li is labor, and φ(Ei) is a piecewise linear

function. In particular, φ(·) implies that in the first 4 years of school, each year yields a

return of 13.4%. In the next four years, each year yields a return of 10.1%, while beyond the

8th year of schooling each year returns 6.8%. The production function can be rearrange as

Ai =

yi

hi

(

Ki

Yi

) α

α−1

,

where yi and hi are per-worker output and human capital, respectively. Taking logs we

have

lnAi = lnyi− lnhi− α1−α ln

(

Ki

Yi

)

. (2)

1. The excel file “DATA_HALL_JONES_1999_QJE.xls” contains the original data in

Hall and Jones (1999). For each country, we have output per-worker (yi), capital to

GDP ratio (Ki/Yi), and years of schooling Ei. Your first job is to obtain, for each

country, a measure of lnhi. You will need to use equation (1) and the assumptions

about φ(·). Plot a graph with lnyi in the vertical axis and lnhi in the horizontal

1

axis. What can you say about the relationship between human capital per-worker and

output per-worker?

2. Now, use equation (2) to obtain a measure of countries’ productivity levels lnAi. Ex-

plain the meaning of this measure. Does lnAi vary too much across-countries? In

particular, what is the mean and the standard deviation of lnAi?

3. Plot a graph with lnyi in the horizontal axis and lnAi in the vertical axis. Is the

relationship between lnyi and lnAi weaker or stronger than the relationship between

lnyi and lnhi? Report both correlations.

4. Pick two developing countries (call them country B and C) and compare them to

Australia (call it country A). In particular, what are the ratios yB/yA and yC/yA.

Then what are the ratios of all the other components (Ai, KiYi , and hi). What is the

main source of income differences between countries B and C and Australia?

Part B: Macrohistory database (5 marks)

In this section, you are asked to use the Macrohistory database. These data have a much

smaller number of countries but a much larger number of years per country. First of all,

familiarize yourself with the dataset and variables. All the relevant information is here:

https://www.macrohistory.net/database/.

1. After familiarizing with the dataset, select a subgroup of variables that you consider

are relevant to understand the drivers of countries’ GDP per-capita. To make this

decision use the models we used in lectures as a guide. However, you are free to think

out of the box and look for relevant relationships we have missed so far.1

2. Provide descriptive statistics on your variables (mean, median, standard deviation).

Discuss how much variation overtime you observe within country. Also, discuss how

much variation across countries you observe for a given year.

3. Proceed to estimate the relationship between (log) GDP per-capita or GDP growth

(your choice) and the variables of interest that you selected. Start by estimating a

simple OLS regression with all the countries pooled together. Interpret the coefficients

of the regression and discuss econometric and economic issues behind the results. Can

you make sense of the results using any existing theory? Are your results consistent

with previous literature?

1Relevant topics that are being investigated, and that might be of interest for you are the role of public

debt, the role of international trade, and the role of financial markets development, among others.

2

4. Extend the previous analysis and estimate a panel fixed-effect regression to control for

countries’ unobserved heterogeneity that might shape the observed heterogeneity in

GDP per-capita (growth).2 How different are the results compared to 3)? Are your

results consistent with previous literature?

5. Using the econometric model in 4) investigate how the relationship between GDP per-

capita and your “X” variables have changed overtime. In particular, how different are

the results of the model when you restrict the sample before 1945 (regression using

sample 1870-1945) and after 1945 (regression using sample 1946-2016? Discuss your

results from an economic perspective, considering the major economic episodes during

each subperiod.

6. Finally, investigate how important is the sample of countries in determining your re-

sults. For example, do your results change substantially when excluding US or Aus-

tralia or Japan from the sample? Discuss potential explanations for your findings.

2These slides are a useful source to refresh your knowledge on OLS and panel fixed-effect regression

https://ssrc.indiana.edu/doc/wimdocs/2011-10-07_mcmanus_panel_slides.pdf. This is relevant to

understand and interpret your results.

3

学霸联盟