Conduct, report and explain the necessary tests for an Error Correction Model ECM.
(Where necessary, do not exceed 3 lag differences when conducting the unit root test).
A discussion relating to the necessary conditions, to be fulfilled, must be provided. Also this discussion must relate the results of the specific tests to the application of the ECM model. A discussion of the null and the alternative hypothesis of each test must also be provided. Note that you must not discuss the operation of the test in detail (example in notation).
Having completed the computer estimation of the workshop file, you must input the results of your estimation. It is strongly recommended the use of print screens as this will allow you to present the information without affecting the word count. Only the results of the estimations must be presented for each series. If a series is integrated of order say I(2) only the results of the test must be presented [example for I(1) and I(2)].Also a clear explanation and reasoning of the specific options selected for each test must be provided.
A discussion of whether these assumptions hold true must also be presented based on the results of the workshop file. A statement should be made whether to proceed or not with the estimation of the ECM model.
Conduct the estimation of the ECM model for exports. Report and explain the results of your estimation. Comment on the output of the estimation.
A discussion of the operation of the Error Correction Model and a clear explanation of how the variables are defined for each type of estimation of the ECM model must be provided.Furthermorean explanation of the different types of variables which are used in each one of the ECM model equations, using notation, should be provided. General types of estimated equations and their differences must also be discussed.
The estimation output should also be presented. A discussion of the process and thenecessaryselected options should be provided. Only the final estimations should be imputed in the coursework. This will include the final estimation equations.Finallya discussion of the estimated results should be performed. All the results of important components and the estimated relationships must be discussed in detail.
Using three articles of your choice published after 2005, critically analyse their applications and results of the Error Correction Model (ECM).
Students must research three articles in which an ECM model is used. However, only the results of one article can be discussed and the remaining two will be used as referencing points.
The results of the one article must be discussed in the following way:
1)Discuss the basic model including the estimated equation and the general theory the article is examining.
2)Discuss the results and conclusions of the article.