[SOLVED] ECON2300 Research Project 2- INTRODUCTORY ECONOMETRICS P0

Research Project 2
Submission of your report
Your report must be single-spaced and in 12 Font size. You should give your answer to each of the following questions following a similar format of the solutions to the tutorial problem sets. When you are required to use R, you must show your R command and R outputs (screenshots or figures generated from R). You will lose 2 points whenever you fail to provide R commands and outputs. For each question, when you are asked to discuss or interpret, your answer has to be brief and compact. You will lose 2 points if your answer is needlessly wordy. You must upload your assignment on the course webpage (Blackboard) in PDF format. (Do not submit a hard copy.)
This project has two research questions. You are required to investigate both of them.
Background
To examine the quantity theory of money, Brumm (2005) [“Money Growth, Output Growth, and Inflation:
A Reexamination of the Modern Quantity Theory’s Linchpin Prediction,” Southern Economic Journal, 71(3), 661–667] specifies the inflation equation
inflat = β1 + β2money + β3output + u
where inflat is the growth rate of the general price level, money is the growth rate of the money supply, and output is the growth rate of national output. Economic theory suggests that β2 = 1 and β3 = −1. The dataset brumm.dta consists of 1995 data on 76 countries.
Research tasks Add
1
Background:
Do citizens demand more democracy and political freedom as their incomes grow? That is, is democracy a normal good? To investigate this issue, you will explore the dataset Income Democracy.dta which contains a panel data set from 195 countries for the years 1960, 1965, … , 2000. A detailed description is given in Income Democracy Description.pdf. The dataset contains an index of political freedom/democracy for each country in each year, together with data on the country’s income and various demographic controls. (The income and demographic controls are lagged five years relative to the democracy index to allow time for democracy to adjust to changes in these variables.)
Research tasks:
2. The index of political freedom/democracy is labeled dem ind.
3. The logarithm of per capita income is labeledAssignment Projelogcgdppct Exam Help.
(b) How large is the estimated coefficient onhttps://powcologdgdppcer.com? Is the coefficient
statistically signifi-
2