Unit Outline

School of Business

Unit Name Economic Modelling

Unit Number 200053

Unit Dr Maria Estela Varua

Coordinator/s

Session Autumn

Year 2014

Handbook This unit builds on concepts explored in Introduction to Economic Methods. The unit broadens the
Summary application of the stochastic linear model in econometrics, exploring its use in the estimation of economic
models and in the testing of economic hypotheses associated with these models. The emphasis is on
learning by doing in small group workshops.

Credit Points 10

Pre-requisites 200052 Introduction to Economic Methods OR 200032 Statistics for Business

Co-requisites Not Applicable

Incompatible/ Not Applicable

not to be
counted for
credit with

Unit Level 3

Assumed Not Applicable

Knowledge

Attendance It is recommended that students attend a minimum of 80% of all classes in order to pass the unit. Please
Requirements note that this means 80% of class time, and not simply signing for 80% of the classes. It is very important to
note that at their discretion, your instructor may deem you have not attended a session if you just sign the
class roll and then leave the class. Please let your lecturer know if you are unable to attend any session.

Enrolment Must have completed pre-requisite.

Restrictions

Learning On successful completion of this unit, students will be able to:

Outcomes
1. Develop confidence in using quantitative analysis.

2. Apply the basic elements of econometric modelling and forecasting.

3. Demonstrate how standard computer software may be used to analyse simple financial and economic
problems (STATA and EXCEL).

4. Demonstrate hands-on experience in constructing econometric models.

5. Apply effectively and appropriately information and communication technologies.

6. Demonstrate the ability to work and learn independently.

7. Define and analyse problems.

Unit Name: Economic Modelling Unit Number: 200053 Teaching Session: Autumn 2014 Page 1 of 2
Unit Content The main topics of the unit are:

1. The probability foundations of econometrics.

2. Use of Matrix in regression analysis.

3. Point estimation in the classical linear econometric model; least squares and likelihood criteria.

4. Hypothesis testing: the Wald, Lagrange multiplier and likelihood ratio tests.

5. Model diagnostics; heteroskedasticity, autocorrelation, model specification testing.

6. Generalised least squares, feasible generalised least squares including autocorrelated errors.

7. Dealing with binary independent variables.

8. Instrumental variable methods.

9. Model discrimination testing; nested tests and testing linear restrictions; non-nested tests.

Mode of Classes will be held over 13 weeks. This unit consists of a two hour lecture, two hour practical fortnightly.
Delivery The general approach will be to cover one topic per session over that period. A typical format will be an
introductory lecture followed by a practical session (during prac weeks) or an online tutorial (during off prac
sessions). Students are expected to prepare for each session by reading ahead and undertaking any
necessary preparation for practical work and group research work. For further details refer to the learning
guide.

Students can only attend the tutorial group for which they are registered. Tutorial places are allocated via
Allocate+ only. Visit https://tutorialregistration.uws.edu.au/aplus/timetable/#subjects for the timetable and
tutorial registration.

Assessment Assessment for this unit will be based on the following components:
Items and
Weighting Component Weighting (%)

Mid-semester examination (90 minutes) 20%

Group research project (10 pages) 20%

Practical exercises (20 minutes) 10%

Final examination (3 hours) 50%

TOTAL 100%

An overall mark of at least 50% is required to pass the unit.

Essential Textbook:
Library
Hill,C.R. Griffiths,W.E. and Lim, 2012. G.C. Principles of Econometrics, 4th edn, Wiley and Sons.
Resources
References: refer to the Learning Guide and vUWS site.

On-line Lecture notes and tutorial questions will be made available on the E-Learning (vUWS) link on the UWS home
Learning page www.uws.edu.au .
Requirements
Students are expected to consult vUWS at least twice a week, as all announcements will be made via vUWS
and teaching material will be regularly updated and posted online.

Special Non-programmable calculator is required.

Requirements

Unit Name: Economic Modelling Unit Number: 200053 Teaching Session: Autumn 2014 Page 2 of 2