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6. For this question please use the Excel file Growth.xls on Moodle. Growth is the average annual percentage growth of real GDP and traseshare
6. For this question please use the Excel file Growth.xls on Moodle. Growth is the average annual percentage growth of real GDP and traseshare is the average share of trade in the economy from 1960 to 1995. We would like to estimate the effect of trade share on the growth rate. (a) Write down the population linear regression equation (let Bo, B, and u denote the intercept, slope, and error term, respectively) (b) Let G; be the growth rate and 7; the trade share for country "i". Use Excel to compute the following sums: (Ti-T) = all i's (T-T)(G-G)= all i's (c) Find the estimated values of the the intercept and slope coefficients. (d) What is the interpretation of B. (e) What is the mathematical expression for the sum of squared residuals? Explain how you come up with this expression. Hint: this is the quantity that OLS attempts to minimize. Use Excel to find the sum of squared residuals in this problem. (f) Import the data into Stata and confirm that the regression output in Stata gives the same estimated values as in part (c). Write in the space below the code you use for this part of the problem. N26 X fx A B E 1 country_name growth oil 2 India 3 Argentina 1.915167928 0 0.617645085 0 4 Japan 4.304759026 0 5 Brazil 2.930096626 F G H rgdp60 tradeshare yearsschool rev_coups assasinations 765.9998169 0.140501976 1.450000048 0.13333334 0.866666675 4462.001465 0.156622976 4.989999771 0.933333337 1.933333278 2953.999512 0.157703221 6.710000038 0 1783.999878 0.200000003 6 United States 1.712264895 0 9895.003906 0.160405084 2.890000105 0.100000001 0.160815045 8.659999847 0.100000001 0 0.433333337 7 Bangladesh 8 Spain 9 Colombia 10 Peru 11 Haiti 0.708263099 2.880326748 2.227014303 0.060205959 -0.65793407 0 951.9998169 0 3123.001465 0 1684.000366 0 2019.000244 0 923.999939 12 Australia 1.975147367 0 7782.002441 13 Italy 14 Greece 15 France 16 Zaire 17 Uruguay 2.932981491 3.224050045 2.431280851 -2.811944485 1.025308609 0 0 4564.000488 0 5823.000488 2093 0.22145839 0.790000021 0.306481481 0.299405932 3.799999952 0.06666667 0.31307286 2.970000029 0.100000001 0.324612707 3.019999981 0.266666681 0.324745566 0.699999988 0.374074072 0.329479247 9.029999733 0.330021679 4.559999943 0.033333335 0.337879002 4.369999886 0.166666672 0.339706242 4.650000095 0.174999997 1.433333278 0.766666651 0.566666663 0.200000003 0 0.06666667 1.200000048 0.166666672 0 0.300000012 0 488.9999084 0.352317631 0.540000021 0.148148149 0.055555556 0 3967.999756 0.358856708 5.070000172 0.166666672 18 Mexico 1.973941803 0 2836.000244 0.393250912 2.410000086 0 0.166666672 19 Pakistan 2.698163033 0 638 0.41760394 0.629999995 0.266666681 0.266666681 20 Niger -2.751477957 0 531.9998779 0.425837249 0.200000003 0.13333334 0 21 Bolivia 0.355057806 0 1147.999756 0.43557933 4.679999828 0.970370352 0.200000003 22 Germany 2.453688145 0 6569.998535 0.442142904 7.639999866 0.06666667 0.233333334 23 Canada 2.385988474 0 7257.99707 0.444374621 8.069999695 0 24 United Kingdom 1.962219477 0 25 New Zealand 1.124131799 6822.999023 0 7960.000977 0.450546652 7.670000076 0.266666681 0.06666667 0.333333343 26 Philippines 1.15874064 0 1133 0.4557693 0.468346566 9.550000191 0 0 27 Finland 2.798494339 0 5291.001953 3.769999981 0.733333349 0.473254889 7.510000229 1.033333302 0 28 Venezuela -0.883550763 0 6337.998047 29 Korea, Republic of 7.15685463 0 904.000061 30 Guatemala 0.92923063 0 31 Honduras 0.597784758 1659.999756 0 1038.999878 0.484600782 2.529999971 0.266666681 0.488949597 3.230000019 0.333333343 0.509590268 1.419999957 0.540740728 2.466666698 0.517664552 1.690000057 0.266666681 0.100000001 0.100000001 32 El Salvador -0.607556105 33 Chile 34 Thailand 35 Sweden 36 Senegal 37 Trinidad and Tobago 1.446995378 4.876695156 1.888134241 -0.43782407 1.120786428 0 1426.999878 0.527773321 1.700000048 0.633333325 0 2885.000488 0.06666667 1.733333349 0 943 0 7592.002441 0.534684658 4.989999771 0.166666672 0.543337107 3.450000048 0.400000006 0.544243515 7.670000076 0.466666669 0.033333335 0 0 0 1047.000122 38 Ecuador 39 Denmark 40 Switzerland 41 Austria 42 Zimbabwe 43 Paraguay 2.388092995 2.179370165 1.421865344 2.88918519 0.838155508 2.381931543 0 5627.001953 0 1460.999634 0.550812602 1.620000005 0.033333335 0.552722335 4.309999943 0.033333335 0.06666667 0 0 0 6759.999023 9408.99707 0 5143.000977 0.56064254 2.950000048 0.533333361 0.56074965 10.06999969 0 0 0.567130983 6.869999886 0 0.575274825 3.650000095 0 0 0 988.9998779 0.582814276 1.539999962 0.200000003 0.233333334 0 1176.999878 0.603035331 3.349999905 0.06666667 0.033333335 44 Costa Rica 1.613696575 45 Portugal 3.64730978 0 46 Togo 0.46277532 0 47 Iceland 3.012388945 48 Israel 49 South Africa 50 Norway 2.810969353 0.39202112 3.182493687 51 Sierra Leone -0.339834213 0 2096.000244 1869 0.613616884 1.940000057 366.999939 0.626079738 0.270000011 0 4963.998535 0.639484167 5.630000114 0 3476.999268 0.646913528 6.989999771 0 2191.000244 0.651203632 4.059999943 0 5610.000488 0.681555152 5.559999943 0 877.999939 0.605031252 3.920000076 0 0 0.233333334 0 0.166666672 0.033333335 0 0 0.06666667 0.100000001 0.200000003 0.366666675 0 0 52 Dominican Republic 2.498769045 0 1194.999756 53 Ghana -0.963162243 0 894 54 Sri Lanka 2.704598427 0 1258.999878 55 Taiwan, China 6.624734402 0 1256 56 Panama 2.02718854 0 1574.999878 57 Papua New Guinea 1.120371103 0 1235.000122 0.699432909 0.529999971 0.474074066 0.704819918 2.380000114 0.300000012 0.729232311 0.689999998 0.437037051 0.100000001 0.742971599 3.430000067 0.200000003 0.200000003 0.745497823 3.319999933 0.033333335 0.06666667 0.779847085 4.260000229 0.13333334 0.06666667 0.798375845 1.129999995 0.033333335 0.033333335 0.200000003 0 58 Kenya 1.962509155 0 659.000061 59 Ireland 60 Jamaica 61 Netherlands 3.254493952 0.417790174 0 3310.999023 0.814710021 1.200000048 0.033333335 0.822956383 6.449999809 0.144444451 0.06666667 62 Cyprus 63 Malaysia 64 Belgium 2.200577259 5.384184361 4.114543915 0 1772.999878 0.830238342 2.460000038 0 6076.99707 0.13333334 65 Mauritius 2.651334524 3.02417779 6.652837753 0 2037.000366 0 1420.000244 0 5495.001953 0 2861.999268 0 0.834204197 5.269999981 0.979355395 4.289999962 0 0 0.100000001 1.105364203 2.339999914 0.033333335 1.115916967 7.460000038 0.166666672 0.033333335 0 1.127936959 2.440000057 0 1374 1.9926157 5.639999866 0 0 66 Malta 67 68 69 70 71 72 73 74 75 76 < > growth +
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