2. I am regressing logged US real GDP in year t on the percent of U.S. residents who are foreign-born in years t, t-1, and t-2, controlling for the logged GDP of Mexico. Results are shown below:

a) Interpret the coefficient for Foreign-born_t.

b) Calculate the impact and long-term multipliers in this regression

c) Which regression coefficients are statistically significant at the 1% level? Which are not? Don't forget the intercept!

d) Do you think this regression will have a reverse causality problem? Why or why not?

e) My friend tells me that I should include the fraction of people in the US who are not foreign-born as a control. Why is this a bad idea?

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