The OLS or Ordinary Least Squares is one of the most widely used models in Econometrics and many other fields. Therefore, the interpretation of coefficients is one of the most…
OLS or Ordinary Least Squares is one of the most common methods used in Econometrics. It is a linear regression technique that minimizes the sum of squared residuals (error term)…
Vector Autoregression or VAR can be estimated using several packages. We will use the "vars" and "tsDyn" packages to illustrate the application of VAR in R. In addition, we will…
There are several packages available for estimating the ARIMA and SARIMA in Rstudio. Autoregressive Integrated Moving Average (ARIMA) and Seasonal Autoregressive Integrated Moving Average (SARIMA) models are often used for…
After estimating Ordinary Least Squares or OLS in Rstudio, we must ensure that the model is a good fit. The model must satisfy the assumptions of OLS including heteroscedasticity, no…
The method of Ordinary Least Squares (OLS) is one of the basic types of analysis in Econometrics. It is widely used in other fields of study as well. R programming…
Simon Kuznets observed a relationship between inequality and development which came to be known as the Kuznets Inverted-U hypothesis. He postulated that inequality in income distribution will rise during the…
Similar to the Lewis Model, the structural change theory by Fei and Ranis attempts to explain the transition of underdeveloped agricultural economies with surplus labour into industrialised economies. Furthermore, the…
Nobel Laureate Arthur Lewis introduced a model of structural change in the 1950s. The Lewis Model of Structural Change focussed on the structural transformation of a subsistence agricultural economy with…
Ragnar Nurkse introduced the concept of the vicious circle of poverty. Many other economists have further developed it. It attempts to shed light on the reasons behind the underdevelopment of…
Over the past decades, the definition and understanding of the term ‘development’ have dramatically changed. The three core values of development by Denis Goulet represent that change in how we…
Nelson's low-level equilibrium trap model attempts to explain the reasons or factors that make it difficult for underdeveloped economies to raise their standard of living. It considers the role and…
Investment decisions of any firm and in the economy as a whole depend on a variety of factors. Investment involves understanding the effects of lags, future expectations and also the…
The accelerator theory explains the relationship between change in output or income and the rate of investment. In this theory, a change in income or output causes a change in…
The life-cycle hypothesis was postulated by Ando and Modigliani in an attempt to explain the behaviour of consumption function in the long and short run. According to this theory, current…
