Economics

Tutorial 1

The attached table gives data for manufacturing sector of an economy for the period 1961-1987.
a.    Import the data into Microfit and create a relevant data set that you can use for your analysis.
b.    Produce plot of relevant variables over time as well as the scatter graphs of Y against K and L.  Very briefly discuss the nature of

relationship in the data.
c.    Check the correlation coefficient between variables and comment on the results.
d.    Check whether the relationship between output and inputs can be captured by a Cobb-Douglas production function.  Very briefly comment

on the results.
e.    Consider the following model:

y = Akeu
where y=Y/L and K=K/L.  Convert the model into an empirical one and estimate the parameters of the model and interpret the results.

All parts carry equal weight.
Please follow the structure of tutorial closely and include relevant outputs from the Microfit under relevant sections; keep your comments

very brief.

Word limit:    500

obs    OUTPUT    CAPITAL    LABOUR
Billions of currency    Billions of currency    1000s
1961    35.858    59.6    637
1962    37.504    64.2    643.2
1963    40.378    68.8    651
1964    46.147    75.5    685.7
1965    51.047    84.4    710.7
1966    53.871    91.8    724.3
1967    56.834    99.9    735.2
1968    65.439    109.1    760.3
1969    74.939    120.7    777.6
1970    80.976    132    780.8
1971    90.802    146.6    825.8
1972    101.955    162.7    864.1
1973    114.367    180.6    894.2
1974    101.823    197.1    891.2
1975    107.572    209.6    887.5
1976    117.6    221.9    892.3
1977    123.224    232.5    930.1
1978    130.971    243.5    969.9
1979    138.842    257.7    1006.9
1980    135.486    274.4    1020.9
1981    133.441    289.5    1017.1
1982    130.388    301.9    1016.1
1983    130.615    314.9    1008.1
1984    132.244    327.7    985.1
1985    137.318    339.4    977.1
1986    137.468    349.492    1007.2
1987    135.75    358.231    1000