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Topics In Applied Econometrics

Course Outline and References

 Production Functions

Stochastic production functions: single and simultaneous equation

Aggregation problem
Technical progress

CES production function and efficiency

Frontier production function

  • A.A. Walters, “Production and Cost Functions: An Econometric Survey”, Econometrica, 1963, Vol 31 No 1, pp 1-66.
    L.R. Klein, A Textbook of Econometrics, chapter 8, (2nd edition), Prentice Hall of India.

  • A.Zellner, J.Kmenta and J.Dreze, “Specification and Estimation of Cobb-Douglas Production Function Models”,
    Econometrica, 1966, Vol 34, pp 784-795.

  • I.Hoch,  “Simultaneous Equation Bias in the Context of the Cobb-Douglas Production Function”, Econometrica, 1958, Vol 26, pp 566-578.

  • L.R.Klein, “Macroeconomics and the Theory of Rational Behaviour”, Econometrica, 1946, Vol 14, pp 93-108.

  • L.R.Klein, “Remarks on the Theory of Aggregation”, Econometrica, 1946, Vol 14, pp 93-108.

  • R.M.Solow, “Technical Change and the Aggregate Production Function”, Review of Economics and Statistics, 1957, pp 312-320.

  • R.R.Nelson, “Aggregate Production Functions and Medium Range Growth Projections”, AER, 1964, LIV.

  • K.J.Arrow, H.B.Chanery, B.S.Minhas and R.M.Solow, “Capital-Labor Substitution and Economic Efficiency”, Review of Economics and Statistics, 1961, pp 225-250.

  • F.Forsund, C.Lovell and P.Schmidt, “A Survey of Frontier Production Function and their Relationships to Efficiency Measurement”, Journal of Econometrics, 1980.

  • Greene. W, “Frontier Production Functions”, in Handbook of Applied Econometrics Vol II edited by M.Hasheem Pesaran and Peter Schmidt, Blackwell (UK), 1997. Chapter 3, pp 81-166.

 Testing Trade Theories

H/O and extensions

Technology based theories of trade

Imperfect Competition, Scale Economy, Intra-industry trade

Gravity model, Linder’s hypotheses

  • E.E.Leamer, Sources of International Comparative Advantage, MIT Press, 1984.

  • A.V.Deardoff, “Testing Trade Theories and Predicting Trade Flows”, in Handbook of International Economics Vol I, (chapter 10), R.W.Jones and P.B.Kenen (eds.), Elsevier Science, 1984.

  • E.E.Leamer, “Testing Trade Theory”, in Surveys in International Trade, D.Greenaway and A.Winters (eds.), Blackwell:Oxford, 1994.

Limited Dependent and Qualitative Variables

  • Applications; Estimation: Probit, Logit, Tobit and Truncated models

  • G.S.Maddala, Limited Dependent and Qualitative Variables in Econometrics, Cambridge University Press, Cambridge, 1983.

  • G.Judge et al, The Theory and Practice of Econometrics, Chapter 18, 2nd Edition, Wiley, 1985.

  • Greene, Econometric Analysis, chapter 19, 20.

  • Johnston and DiNardo, Econometric Methods, chapter 13.

Panel Models

  • Greene, Econometric Analysis, chapter 14.

  • Johnston and DiNardo, Econometric Methods, chapter 12.

Time Series Estimation and Forecasting

References to be supplied in the class