Estimate a regression model to evaluate the impacts of the three major determinants on your chosen variable of interest

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Estimate a regression model to evaluate the impacts of the three major determinants on your chosen variable of interest

Determinants of economic and financial variables

Details of what you are expected to do:

1.  Rationale

This assignment will enable students to assess how the financial markets and the monetary system operates and will assist in gaining important quantitative skills related to the unit.

2.  The learning outcomes being assessed

This coursework assesses all learning outcomes

3.  Overview of assignment

You are required to produce a report on the determinants of one of these variables: inflation, bond yields or stock market. Your report should be based on a country that will be provided to you by the unit tutor. The choice of the variable of interest will also be provided by the unit tutor.

REQUIREMENTS

Your report must fulfil the following specific tasks:

1. Collect and tabulate 10 years of monthly or 20 years of quarterly data on your chosen variable of interest from the list above, and also on any three major determinants of the variable.

2. Estimate a regression model to evaluate the impacts of the three major determinants on your chosen variable of interest.

3. Write a report analyzing the findings of your research. You are required to demonstrate a logical and coherent interpretation of theory and research findings, illustrating your arguments with appropriate diagrams where necessary.

The report must include the following sections: (i) Introduction (10 marks), (ii) Literature Review (20 marks), (iii) Analysis of Data and Justification of Research Method (20 marks), (iv) Empirical Findings and their Interpretations (40 marks), (v) Conclusions, Recommendations and Harvard-style Reference list (10 marks).