Q1- done

Q2- explain correlation (China, Turkey)

Q3- idk how to apply the theory

Country N Turkey Turkey China China Country CoSeries NamSeries Cod 1985 1986 1987 1988 1989 1990 TUR Trade (% o NE.TRD.GNF34.82697 29.41446 33.33829 36.20683 33.98367 30.943 TUR GDP per caNY.GDP.PCA5659.219 5935.886 6375.27 6403.818 6308.636 6774.408 CHN Trade (% o NE.TRD.GNF20.95932 19.95461 25.23061 30.41765 25.64154 24.68415 CHN GDP per caNY.GDP.PCA538.6908 578.184 635.4946 695.599 713.6895 730.7725 Data from database: World Development Indicators Last Updated: 08/02/2017 Turkey Inequality China Inequality Turkey Openness 1985 0.021297 34.82697 1986 0.019978 29.41446 1987 0.024768 0.012516 33.33829 1988 0.024816 0.014761 36.20683 1989 0.037804 0.017869 33.98367 1990 0.049503 0.01759 30.943 1991 0.040642 0.020532 30.47601 1992 0.057835 0.026185 31.73737 1993 0.052717 0.045097 33.01709 1994 0.06393 0.04978 41.74585 1995 0.071023 0.044631 44.24263 1996 0.055264 0.044299 49.36931 1997 0.052625 0.056522 54.97032 1998 0.06306 0.052705 40.27435 1999 0.058415 0.058495 37.40162 2000 0.066129 0.062083 42.0006 2001 0.075108 0.06859 49.39883 2002 0.072521 0.069719 47.46054 2003 0.069935 0.07603 45.60147 2004 0.061918 0.079351 48.11968 2005 0.058427 0.079619 45.43714 1991 1992 1993 1994 1995 30.47601 31.73737 33.01709 41.74585 44.24263 6708.883 6931.902 7343.095 6889.595 7315.178 26.74043 30.61509 37.31851 36.51788 34.75902 787.8674 888.911 1000.612 1118.5 1227.556 1996 49.36931 7731.177 34.53907 1335.363 1997 54.97032 8186.243 33.57786 1443.775 1998 40.27435 8244.498 32.84432 1542.064 1999 2000 37.40162 42.0006 7842.595 8237.344 34.04191 39.75277 1645.988 1771.741 2001 49.39883 7631.405 39.05384 1905.611 2002 2003 2004 2005 47.46054 45.60147 48.11968 45.43714 8003.481 8331.76 9009.596 9691.818 43.09296 52.59747 60.22079 62.89042 2065.719 2258.912 2472.587 2738.205 Code NE.TRD.GNFS.ZS NY.GDP.PCAP.KD Indicator Name Trade (% of GDP) GDP per capita (constant 2010 US$) Long definition Trade is the sum of exports and imports of goods and services GDP per capita is gross domestic product divided by midyear popu Source World Bank national accounts data, and OECD National Accounts data files. World Bank national accounts data, and OECD National Accounts data files. INTERNATIONAL TRADE (ECON 1086- RMIT, Australia) (ECON 1269- RMIT, Vietnam) (ECON 1089- SIM, Singapore) ASSIGNMENT 2 PLEASE CHECK RMIT/SIM BLACBOARD FOR RELEVANT DUE DATE; IT IS UP TO YOU TO FIND THIS OUT. 1. 2. 3. 4. Instructions for submission: Click on Assessment tasks in BlackBoard. Click on Assignment 2. This is in red. Scroll down to Assignment Submission. Attach your file by clicking on \"Browse My Computer\". To answer the assignment questions first get the data follow these steps. 1. This assignment requires you to obtain data from two (2) countries of your choosing over the period 1985-2005. 2. Obtain country-level data on trade (% GDP) and GDP per capita (constant 2010 US$) from the World Bank's World Development Indicators (http://databank.worldbank.org/data/reports.aspx?source=worlddevelopmentindicators). 3. Obtain data on industrial pay inequality difference from UTIP-UNIDO (http://utip.gov.utexas.edu/data.html). 4. Merge the data using Excel. It is up to you to figure out how to do this! 5. The data does not need to be for the same countries as in Assignment 1. It is up to you what countries you use. 6. DO NOT attach Excel files to the assignment. 7. Keep explanations brief. Policy analysis in applied economics has to be brief. Be precise and to the point, avoid jargon. International Trade Assignment 2 Page 1 Assignment 2 (25% of your final grade) Check BLACKBOARD for due dates. *** Follow the instructions above on how to get the data. *** See Chapter 6 for references. 1. Using data from two countries, plot openness versus Industrial Pay Inequality (from UTIP-UNIDO) for each nation. Use two graphs, one for each country. IT'S UP TO YOU TO FIGURE OUT HOW TO DO THIS. (8 marks) TURKEY 60 50 40 Openness 30 20 10 0 0.01 0.02 0.03 0.04 0.05 Inequality 0.06 0.07 0.08 CHINA 60 50 40 Openness 30 20 10 0 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 Inequality 2. Using data from the two countries, calculate the correlation (using excel) between openness and Industrial Pay Inequality (from UTIP-UNIDO) for each nation, respectively. Report and interpret this relationship in up to 100 words. [Hint: The Theil Index is used as a proxy for the ratio of skilled to unskilled wages in empirical studies]. DO NOT ATTACH YOUR DATA TO THE ASSIGNMENT. (7 marks) Turkey Correlation= 0.6398 China Correlation= 0.86201 As can be seen by this, China is highly correlated as compared with Turkey. This suggest that as the openness to trade in China has increased wage inequality at lower levels of income, however no dramatic effect at higher levels of income. 3. Explain carefully in up to 400 words whether your data agrees or disagrees with the Stolper-Samuelson Theorem. (Remember to accurately define the theorem and discuss how it applies to your countries). (10 marks). The Stolper-Samuelson Theorem is a principle and very important theory of international trade. The theory argues that in each country when there is a rise in the price of unskilled-intensive good, it raises the income of unskilled workers in regards to the good, however it lowers the income of skilled workers in terms of both goods. International Trade Assignment 2 Page 2