Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In their study of the demand for international reserves ( i . e . , foreign reserve currency such as the dollar or International Monetary

In their study of the demand for international reserves (i.e., foreign reserve currency such as the dollar or International Monetary Fund [IMF] drawing rights), Mohsen Bahami-oskooee and Margaret Malixi obtained the following regression results for a sample of 28 less developed countries (LDC):

????????(????????)=0.1223+0.4079????????(????????)+0.5040????????????????????-0.0918????????????????????

????=    (2.5128)(17.6377),(15.2437)(-2.7449)

????2=0.8268

????=1151

????=1120

where ????= the level of nominal reserves in U.S. dollars

????= U.S. implicit price defiator for GNP

???? the nominal GNP in U.S. dollars

ofII the variability measure of balance of payments

????????????= the variability measure of exchange rates

(Nofes: The figures in parentheses are 1 ratios. This regression was based on guarterly data from 1976 to 1985 ( 40 quarters) for each of the 28 countries, giving a total sample size of 1120 .)

a. A priori, what are the expected signs of the various coefficientsfi Are the , results in accord with these expectationsfi

b. What is the interpretation of the various partial slope coefficient?

c. test the statistical Significance of each Estimated partial regression coefficient(that is the null hypothesis is that Individually each true or cooperation regression coefficient is equal to zero)

d) how would you test the hypothesis that all parts are sLOpe coefficients simultaneously zero?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economics of Money, Banking and Financial Markets

Authors: Frederic S. Mishkin

9th Edition

978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905

More Books

Students also viewed these Economics questions