Fecha:14 de octubre de 2022

Subject: Econometric Models I

Members:
Churta Cuajiboy Nayeli Pierina
Dominguez Romero Karen Patricia
Carlos Luis Ludeña Loayza

Group Activity 3
1.3. Table 1.4 presents the exchange rates of nine industrialized countries corresponding to 1985-2006. Except for Great Britain,
The exchange rate is defined as the units of currency equivalent to one US dollar; for that country, it is defined as the number of
US dollars exchanged for a British pound.
a) Grafique los tipos de cambio en función del tiempo y comente el comportamiento general de los tipos de cambio durante el periodo. b) Se
It is said that the dollar has an appreciation if more units of a currency are bought. On the contrary, it is said to suffer depreciation if it
they acquire fewer currencies. In the period from 1985 to 2006, in general, what behavior did the US dollar have? By the way, look for it in a
Text on macroeconomics or international economics regarding the factors that determine the appreciation or depreciation of a currency.

TABLE 1.4 Foreign exchange rates, 1985–2006

Gran
Australia Canada China, P.R. Mexico Korea of Sweden Switzerland
Year Japan (yen) Brittany
dollar (dollar) yuan (weight) Sur (won) (crown) franc
pound
1985 0.7003 1,3659 2.9434 238.47 0.257 872.45 8.6032 2.4552 1,2974
1986 0.6709 1,3896 3.4616 168.35 0.612 884.60 7.1273 1,7979 1,4677
1987 0.7014 1,3259 3.7314 144.60 1,378 826.16 6,3469 1,4918 1.6398
1988 0,7841 1.2306 3.7314 128.17 2,273 734.52 6,1370 1.4643 1,7813
1989 0.7919 1,1842 3,7673 138.07 2,461 674.13 6.4559 1.6369 1,6382
1990 0.7807 1.1668 4.7921 145.00 2,813 710.64 5.9231 1.3901 1,7841
1991 0.7787 1,1460 5.3337 134,59 3,018 736.73 6.0521 1.4356 1.7674
1992 0,7352 1,2085 5.5206 126.78 3,095 784.66 5.8258 1.4064 1.7663
1993 0.6799 1.2902 5.7795 111.08 3,116 805.75 7.7956 1.4781 1.5016
1994 0.7316 1.3664 8.6397 102.18 3,385 806,93 7.7161 1.3667 1.5319
1995 0.7407 1.3725 8.37 93.96 6,447 772.69 7,1406 1,1812 1,5785
1996 0.7828 1,3638 8.3389 108.78 7,600 805.00 6,7082 1,2361 1,5607
1997 0.7437 1,3849 8.3193 121.06 7,918 953,19 7,6446 1,4514 1,6376
1998 0.6291 1,4836 8.3008 130.99 9,152 1,400.40 7.9522 1,4506 1,6573
1999 0.6454 1.4858 8.2783 113.73 9,553 1,189.84 8.2740 1.5045 1.6172
2000 0.5815 1,4855 8.2784 107.80 9,459 1,130.90 9.1735 1.6904 1,5156
2001 0.5169 1.5487 8.2770 121,57 9,337 1,292.02 10.3425 1,6891 1.4396
2002 0.5437 1.5704 8.2771 125.22 9,663 1,250.31 9.7233 1.5567 1,5025
2003 0.6524 1,4008 8.2772 115.94 10,793 1.192,08 8.0787 1,3450 1,6347
2004 0.7365 1,3017 8.2768 108.15 11,290 1,145.24 7.3480 1.2428 1,8330
2005 0.7627 1,2115 8,1936 110.11 10,894 1.023,75 7,4710 1,2459 1.8204
2006 0.7535 1.1340 7.9723 116.31 10,906 954,32 7.3718 1,2532 1.8434

a) Graph the exchange rates as a function of time and comment on the general behavior of the exchange rates during the period.

12
Exchange Rates Over Time
1600 10
1400 Australia (dollar)
Australia (dollar)
Canada (dollar) 8
1200 Canada (dollar)
1000 China, P.R. (yuan)
6 China, P.R. (yuan)
800 Japan (yen)
Mexico (peso)
600 Mexico (peso) 4
2.4. Why is regression analysis necessary? Why not just use the mean value of the regressed variable as its best value?
First, it can be said that regression analysis is important because it examines the dependence (of a dependent variable) on one or more variables (the so-called explanatory or exogenous variables) to estimate and/or
predict the mean or population value of the dependent variable; based on known or fixed values of explanatory variables. The mean of the dependent variable cannot be used because the more data there is,
greater is the reliability and accuracy of the results.

2.5. What is intended to be conveyed by the linear regression model?

A linear regression model is a mathematical model used to approximate the relationship between the dependent variable Y, the independent variables Xi, and the random term ε. Therefore, it is assumed that it is
a linear regression of the parameters and the βs of the other parameters. Terms, the parameters must be raised to the first degree; it may or may not be linear in the explanatory variables.

Bibliography

Damodar N, G. D. (2010). ECONOMETRICS. Mexico City: McGraw Hill.

 EXERCISE 2.14

The data from table 2.7 corresponding to the United States from 1980 onwards is provided. Year TPFLCM TPFLCF TDCH TDCM IPH82 IPH
2006. 1980 77.4 51.5 6,9 7.4 7,99 6.84
a) Graph the participation rate of the male civilian labor force as a function of the civilian unemployment rate for the 1981 77 52.1 7.4 7.9 7.88 7,43
men. Manually draw a regression line through the scatter points. Mention the expected relationship a priori. 1982 76.6 52.6 9.9 9.4 7.86 7.86
between both rates and comment on which economic theory serves as the foundation. Does this scatterplot 1983 76.4 52.9 9.9 9.2 7.95 8,19
Does it support that theory?
1984 76.4 53.6 7.4 7.6 7.95 8.48
b) Repeat the item for women. 1985 76.3 54.5 7 7.4 7.91 8.73
c) Now graph the labor force participation rates of both sexes as a function of average hourly earnings (in 1986 76.3 55.3 6.9 7.1 7.96 8.92
dollars from 1982). (It may be useful to use independent diagrams.) Now, what do you conclude? How would you rationalize that
1987 76.2 56 6.2 6.2 7.86 9.13
conclusion?
1988 76.2 56.6 5.5 5,6 7,81 9.43
1989 76.4 57.4 5.2 5.4 7.75 9.8
1990 76.4 57.5 5.7 5.5 7,66 10,19
1991 75.8 57.4 7.2 6.4 7,58 10,5
A) 1992 75.8 57.8 7,9 7 7.55 10.76
After performing the regression, I can see that the 1993 75.4 57.9 7.2 6.6 7.52 11.03
Analyzing the variables, the lower the unemployment rate the relationship between the variables is different from the 1994 75.1 58,8 6.2 6 7,53 11.32
civic of men, I would expect men to have
proposal in the first instance. The greater it is 1995 75 58.9 5,6 5.6 7.53 11.64
a higher labor force participation rate, as it is expected that the higher the unemployment rate, the higher the rate of 1996 74.9 59.3 5.4 5.4 7.57 12.03
more men work compared to women.
labor force participation. 1997 75 59.8 4.9 5 7.68 12.49
1998 74.9 59.8 4.4 4.6 7,89 13
1999 74.7 60 4.1 4.3 8 13.47
TDCH adjusted regression curve 2000 74.8 59.9 3.9 4.1 8.03 14
2001 74.4 59.8 4.8 4.7 8,11 14.53
78 2002 74.1 59.6 5.9 5,6 8.24 14.95
77 2003 73.5 59.5 6,3 5.7 8.27 15.35
2004 73.3 59.2 5.6 5.4 8.23 15.67
76
TPFLCM 2005 73.3 59.3 5.1 5.1 8,17 16.11
75 2006 73.5 59.4 4.6 4.6 8.23 16.73
TPFLCM Forecast
74
Linear (Forecast TPFLCM)
73
0 2 4 6 8 10 12
TDCH

B)
For women, one might expect to observe the same relationship. In fact, due to the correlation between the data
as in the previous case, but the composition of the participation between men and women, the relationship between the
in the workforce can be influenced by the rates of variables changed since they were a rate of
unemployment of both samples. relative participation to the sum of the two.

TDCM Adjusted Regression Curve

62.0
60.0
 D)

Since I cannot plot the three variables on the same scatter plot, I will discuss it orally. On one hand, the rates of
participation is also affected by unemployment and hourly wages (men directly affect women
and vice versa).