DANIM CW2 Sem2 2014 2015

Topics: NAIRU, Unemployment, Natural rate of unemployment Pages: 5 (1165 words) Published: April 16, 2015
Module name
CW number and title
EUZC405: Data Analysis and Information Management in Business CW1: Data analysis
CW weighting
CW checks the learning outcomes
1. Identify and access the main internal and external sources of data and methods of data collection relevant to the business organisation; 2. Gather, filter and manipulate relevant data for presentation and quantitative analysis using computer applications; 3. Select and apply appropriate, simple modelling and forecasting methods as well as mathematical techniques in a range of commonly occurring business situations; 4. Interpret results in a business context ;

5. Identify priorities and allocate tasks within a group
Submission deadline

Submit your report to
a. Registrar’s Office by 17:00 16.04.2015
b. Also, submit online to intranet of WIUT by the same time as well.

CW format (individual/group)

Group Assignment
(Written Report and e-copy in CD, as well as online submission


The Coursework requires you to produce a written report (with e-copy in CD) on the task. This is a group assignment and requires you to work in groups.

Task overview
Your task consists of 2 main parts:
1. Part 1. You have to test the hypothesis that slope of the following equation (Okun’s law or Okun’s regularity) has a non-zero slope () for the country given to your CW group by your tutor:

2. Part 2. You need to do trend forecast for your CW country’s GDP for the next 2 years (2014-2015), using time (t) as independent variable and GDP (Y) as dependent variable: a. Calculate coefficients of

b. Continue and calculate Y trend values for 2014 and 2015.

Detailed description of the task
The following is the detailed description of the procedure of writing up your CW, with mark allocation for the parts of the CW provided below:

Part I. Part 1. Okun’s law.
You need to test the hypothesis that slope is not equal to zero (H1: ) with respect to Okun’s law:

:Output gap, or difference between actual and potential GDP for given year, where: :Actual GDP for t-th year
:Potential GDPfor t-th year, calculatedout of actual GDP (Yt) using Hodrick-Prescott Filter (using excel add-ins or other statistical programs). : Intercept
:Difference between actual (u) and natural rate of unemployment level () (also called Cyclical unemployment), where: :Actual unemployment for t-th year
:Natural rate of unemploymentfor t-th year, calculated using Hodrick-Prescott filter (using excel add-ins or other statistical programs) :Error term of the model for t-th year

Detailed description of steps for Part 1:

1. Collect the data from IMF website.
Choose and download the following data for the period of 1980-2013 for the country given to your CW group by your tutor: a. Output gap in percent of potential GDP
b. Unemployment

2. Calculate cyclical unemployment, or from the information on ut: a. Download HP filter excel add-in (e.g. you can download it here). This add-in will help you to calculate . b. Apply / use HP filter and calculate For 34 observations (1980 – 2013 year inclusive comes to 34 observations) you will have 34 . c. Since you have , as well as , calculate for all 34 years.

3. Do descriptive statistics (for output gap and cyclical unemployment ), including measures of central tendency and measures of variability. a. Do it using excel tool-packs
b. Also do it manually

4. Calculate correlation and regression coefficients with output gap () dependent variable, and cyclical unemployment () as independent variable: a. Use excel functions to calculate:
i. Correlation between two variables.
ii. - intercept
iii. – slope
b. Additionally, calculate all of those coefficients above manually (provide formula in excel sheet). 5. Test the Hypothesis H1: . (at 5% significance) using t statistics ().

Part II. Time series regression

6. Calculate coefficients of , (both...
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