Using the World Bank World Development Indicators (WDI) download relevant time series data for your model

Make use of other internationally reputable sources to complement your dataset if data are not available in the WDI. Conduct a preliminary analysis of your data using relevant descriptive statistics techniques. 10%

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C: Run relevant regressions using Microfit (available in P2.12 Pemberton). Present the output of your regression, comment on the regression results generated and discuss their theoretical and empirical validity. 20%

D: Discuss the main problems that you may face conducting regression analysis (other than non-stationarity), and by reference to your regression results, discuss whether they suffer from any of these problems. Make use of relevant diagnostic tests whenever appropriate. 20%

E: Identify whether the variables in your model suffer from non-stationarity. Discuss the possible implication of non-stationarity for your model and how this problem could be aIDressed. 20%

F: In the light of your findings under D and E above, make any necessary changes to your model to correct for any of the problems that you have identified. Compare and contrast results generated here with those under C. To what extent are you confident about the reliability of your result? What are the policy implications from this analysis? 20%

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