ECS4863 Assignment 3 (COMPLETE ANSWERS) 2025 – DUE 18 August 2025

ECS4863
Assignment 3
Due 18 August 2025

, ECS4863

Advanced Econometrics

Assignment 3 – Semester 2, 2025
Due Date: 18 August 2025
Student Name: [Insert Name]
Student Number: [Insert Number]

Table of Contents

1. Introduction
2. Question 1: Panel Data Theory
o 1.1 Random Effects vs. Pooled OLS
o 1.2 Choosing between Random Effects and Pooled OLS
o 1.3 Assumptions of First-Differencing Estimator
3. Question 2: GDP Production Function for G7 Countries
o 2.1 Introduction to the Model
o 2.2 Data Description and Simulated Dataset
o 2.3 Scatterplots and Interpretation
o 2.4 Pooled OLS Estimation and Results
o 2.5 Random Effects Estimation and Comparison
o 2.6 Feasible GLS Estimation
o 2.7 Testing for Redundancy of CPI and Population
o 2.8 Policy Implications of the Findings
4. Conclusion
5. References