To Study the Determinants of Growth Between the Countries of the World

question 45

Essay

To study the determinants of growth between the countries of the world, researchers have used panels of countries and observations spanning over long periods of time (e.g. 1965-1975, 1975-1985, 1985-1990). Some of these studies have focused on the effect that inflation has on growth and found that although the effect is small for a given time period, it accumulates over time and therefore has an important negative effect.
(a)Explain why the OLS estimator may be biased in this case.
(b)Explain how methods using panel data could potentially alleviate the problem.
(c)Some authors have suggested using an index of central bank independence as an instrumental. Discuss whether or not such an index would be a valid instrument.

Understand the process and calculations involved in creating production budgets.

Understand the process and calculations involved in creating direct materials budgets.

Calculate cash payments for materials based on budgeted purchases and payment terms.

Understand and apply the concept of cash collections and receipts from sales, including sales on credit.

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