DESCRIPTION OF THE PROJECT PAPER ASSIGNMENT

This assignment is a group type of assignment. Form a group of four people. Decide on a macroeconomic topic which involves analysis of variables. Conduct a quantitative analysis as demonstrated in class. Write and submit the report analysis.

--------------------------------------------------------------------------------------------GUIDELINES IN REPORT WRITING* 1. INTRO - DEFINE - OBJECTIVE OF THE STUDY 2. METHODOLOGY - MODEL - TESTS OF ANALYSIS -Graphs -corrlation test -regression test 3. RESULTS REPORTING -Graphs -correlation test -regression test 4. CONCLUSION [3 marks]

[5 marks]

[5 marks]

[2 marks]

*Note: length of paper 5 pages or more.

STEP BY STEP PROCEDURE OF AN IN-CLASS WORKSHOP ON REGRESSION ANALYSIS

STEPS 1. determine the model of the analysis and the tests involved.
TITLE OF ANALYSIS: MODEL:

The impact of change in monetary policy on GDP

Y
DEP.

= f (X1, X2......Xn)
INDEP

GDP = f (MS , INF) 2. identify and find the data involves GDP, MS3, CPI, time-periods (quarters)

3. key-in the data into excell

4. treat the data : i. transform into real or standard values, (Data must all be in Real values); where: GDPn GDPr GDPr = (GDPn / deflator) [GDP / (CPI/100)] MSr MSr = [MS/(CPI/100)]

MSn

INF = [(CPI 1 - CPI 1-1) / CPI1-1] x 100 ii. log10 those variables. Why log? To neutralize the values.

TRANSFERING THE DATA FROM EXCELL TO SPSS 5. open spss / do variable setting / cut and past data into spss Steps: open spss. Take note of the: 1. variable view / do variable set-up 2. data view / cut and paste data from excel to spss spreadsheet. IN CLASS DEMO 1. Generate graphs - explain 2. run Correlation Test - explain 3. run the regression test. - explain

Coefficients

Standardized Unstandardized Coefficients Model 1 (Constant) MS INF a. Dependent Variable: GDP B 1.861 .643 .005 Std. Error .068 .013 .002 1.024 .066 Coefficients Beta t 27.462 51.206 3.287 Sig. .000 .000 .003

EQUATION FUNCTION:

GDP = 1.861 + 0.643MS* + 0.005INF*

The results obtained show that, the MS and INF factors are both positively associated with changes in GDP. The magnitude of change documented in this analysis is: a 1% change in MS resulted a 0.643% change in the GDP, while a 1% change in INF, resulted a 0.005% change in the GDP. The percents of change are all less than 1, which gives indication that the GDP is relatively insensitive to change in MS and is more insensitif to change in INF. The results for both variables are robust as both variables documented significant results in which the significant values (in last column) values are less than 0.05.