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You have collected data for 104 countries to address the difficult questions of the determinants for differences in the standard of living among the countries
You have collected data for 104 countries to address the difficult questions of the determinants for differences in the standard of living among the countries of the world. You recall from your macroeconomics lectures that the neoclassical growth model suggests that output per worker (per capita income) levels are determined by, among others, the saving rate and population growth rate. To test the predictions of this growth model, you run the following regression: = 0.339 12.894 n + 1.397 sK , R2=0.621, SER = 0.177 (0.068) (3.177) (0.229) where RelPersInc is GDP per worker relative to the United States, n is the average population growth rate, 1980-1990, and sK is the average investment share of GDP from 1960 to 1990. a. Calculate the t-statistics and test whether or not each of the population parameters are significantly different from zero at the 5% significance level. b. The overall F-statistic for the regression is 79.11. What is the critical value at the 5% and 1% level? What is your decision on the null hypothesis
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