Prof. Bryan Caplan

http://www.gmu.edu/departments/economics/bcaplan

Econ 345

Fall, 1998

HW#1

Part I: Math

Wallace and Silver, *Econometrics* – do exercises: 1.1, 1.8, 1.9, 1.16

Freedman and Lane, *Mathematical Methods in Statistics*: p.30#5, p.35#1, p.46#7, p.53#4

Also do this problem:

- You know that the number of years a George Mason student has been in college is normally distributed in the population. You get data for 5 students, and find that they have been here for .5, 1.1, 1.3, 1.5, and 6 years respectively.

- Estimate the population mean and population variance based on this sample.
- Then test the hypothesis (at the 5% confidence level) that the true population mean is 5 years. Should you use a t-test or the normal distribution to do this? Why?

Part II: Computing

- Download the Eviews workfile "hw1.bin" for U.S. inflation and unemployment off my webpage. You can do this by simply going to my page, then saving the file to your hard drive or a floppy disk.
- Following the instructions on the
*Introduction to Eviews*handout, start Eviews and open the workfile. - Get used to using Eviews by opening the variables inf and un.
- Using the instructions in the handout, print off the summary statistics for inf and un.
- Using the instructions in the handout, figure out the correlation between inf and un (and copy or print out your answer!). Does your answer surprise you?