Subject to the External Examiner’s approval and may be subject to change LUBS3370
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This question paper consists
of 4 printed pages, each is
identified by the Code Number
LUBS3370
© UNIVERSITY OF LEEDS
(Semester 1 - 2023/2024)
Assessed Coursework
LUBS3370 - Applied Econometrics
100% Individual Assignment
Students are individually required to conduct 3000 words (max) individual research
project on the Determinants of inflation while focusing on the period 2000Q1 –
2023Q2. The research project counts for 100% of the final grade. You will focus
only on the three determinants of inflation i.e., broad money supply, effective
exchange rate and energy prices.
There are three parts (A–C) to the coursework.
Part A (40 Marks): You need to choose only one country for this part. It can be
any country in the world but MUST NOT BE the UK. You will be required to collect
the data on inflation rate, effective exchange rate, broad money supply (M3) and
global energy prices from 2000Q1 to 2023Q2 for your chosen country.
The data must be collected from reliable sources. One of the potential source for
data on inflation (CPI) is the OECD database.
reliable/official source (for example, International Monetary Fund- International
Financial Statistics (IMF-IFS) and can also choose a country which is non-OECD.
But, in any case, you must mention the source of data and also provide the
dataset as an appendix. For the broad money supply, you can also use the
OCED database
For the exchange rate, you can use the BIS effective exchange rate.
For the energy prices, you can use the Global Price of Energy index.
You may have to do the necessary transformation of data to match the
frequency.
Ø Before, you analyse the collected data, you need to write an introduction
focusing on relevant literature on the determinants of inflation. Specifically,
Subject to the External Examiner’s approval and may be subject to change LUBS3370
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you focus on the money supply, energy prices and exchange rate as
determinants of inflation and conduct a 600 words literature review. After
the review of the literature, you need to analyse the data.
Ø Provide the summary statistics of the dataset.
Ø Please estimate inflation as an ARMA model where the model is selected
based on information criteria. Please present results professionally in
Tables and discuss/interpret them.
Ø Please specify the ARDL model in the summation form.
Ø The specified model ARDL model is to be estimated. The lag length
should be based on the information criteria. Please present results
professionally in Tables and discuss/interpret them.
Part B (40 Marks): For Part B, you need to include 4 more countries in
the analysis, making 5 countries in total. At this point, you can include the UK if
you wish to, though it is not compulsory.
Ø After the collection of data, you need to do the panel estimation using
Pooled OLS, Fixed and Random Effect Models. Please present results
professionally in Tables and discuss/interpret them.
Ø You also need to do the necessary procedure to find out which is the most
appropriate model among POLS, Fixed and Random Effects and comment
on your findings.
Part C (20 Marks):
For part C, you are required to use the discreet choice model. But let’s assume
that the countries you have chosen have an inflation target of 2% i.e. the central
banks try to keep the inflation at 2% or lower.
Ø Please create a new dummy variable Inflationtarget taking values of 0 and
1. It should take the value of 1 if the inflation in the given quarter is within
target otherwise it should take the value of 0.
Ø Estimate either a logit or a probit models and present your results
professionally.
Ø Calculate the average marginal effects and marginal effects at
mean/average and interpret the results with respect to the energy prices.
Ø Please also include a short conclusion section (Appx. 200 words) at the
end of the coursework.
Subject to the External Examiner’s approval and may be subject to change LUBS3370
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Note: Your literature needs to be adequately cited with a reference list at the
end. For further information on Harvard Referencing style please look at
STATA outputs in the appendix. The STATA outputs should not be directly
copied and pasted into the body of coursework to show the results. For the
results, you should make Tables which include relevant outputs and statistics.
Assignments should be a maximum of 3000 words in length.
All coursework assignments that contribute to the assessment of a module are subject to a word limit,
as specified on the assessment brief. The word limit is an extremely important aspect of good
academic practice, and must be adhered to. Unless stated otherwise in the relevant module
handbook (if one has been provided), the word count includes EVERYTHING (i.e. all text in the main
body of the assignment including summaries, subtitles, contents pages, tables, supportive material
whether in footnotes or in-text references) except the main title, reference list and/or bibliography and
any appendices. It is not acceptable to present matters of substance, which should be included in the
main body of the text, in the appendices (“appendix abuse”). It is not acceptable to attempt to hide
words in graphs and diagrams; only text which is strictly necessary should be included in graphs and
diagrams.
You are required to adhere to the word limit specified and state an accurate word count on the cover
page of your assignment brief. Your declared word count must be accurate, and should not mislead.
Making a fraudulent statement concerning the work submitted for assessment could be considered
academic malpractice and investigated as such. If the amount of work submitted is higher than that
specified by the word limit or that declared on your word count, this may be reflected in the mark
awarded and noted through individual feedback given to you.
The deadline date for this assignment is 12:00:00 noon on 14th December 2023.
An electronic copy of the assignment must be submitted to the Assignment Submission area within the
module resource on the Blackboard MINERVA website no later than 12:00:00 noon prompt on the
deadline date.
Faxed, emailed or hard copies of the assignment will not be accepted.
Failure to meet this initial deadline will result in a reduction of marks, details of which can be found at
the following place:
SUBMISSION
Please ensure that you leave sufficient time to complete the online submission process, as upload
times can vary. Accessing the submission link before the deadline does NOT constitute completion of
submission. You MUST click the ‘CONFIRM’ button before 12:00:00 noon for your assignment to be
classed as submitted on time, if not you will need to submit to the Late Area and your assignment will
be marked as late. It is your responsibility to ensure you upload the correct file to the MINERVA, and
that it has uploaded successfully.
It is important that any file submitted follows the conventions stated below:
FILE NAME
The name of the file that you upload must be your student ID only.
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ASSIGNMENT TITLE
During the submission process the system will ask you to enter the title of your submission. This should
also be your student ID only.
FRONT COVER
The first page of your assignment should always be the Assessed Coursework Coversheet (individual),
which is available to download from the following location:
STUDENT NAME
You should NOT include your name anywhere on your assignment
END
