Econometrics Project- Tax income in the United State and United Dissertation

Econometrics Project- Tax income in the United State and United Kingdom - Dissertation ExampleStrong support for Keynesian model in US data. Insignificant coefficient of interest rate in UK data. Unit root test of residuals indicate possibility of these being spurious. Engel and Granger (1987) error correction model pursued to utilize co-integrated disposition of data. Only the dynamics of output seems to matter for growth in investment. Interest rate changes does not harbor any significant impacts. Accelerator model performs substantially better in both economies. However, unit root tests reveal these results may be spurious. Null assumption of non-cointegration could not be rejected. So, we could not proceed with Engel and Granger error correction methodology. Instead ran regressions in differences. The growth in lagged real output turns out to be significant for growth in investment. There is a direct relation. ... Further, any model is yet to be convincingly validated empiric ally. However, till date the trump out performance in terms of fitting the data is credited to the actual and variants of the acceleration principle. The objective of the present paper is to utilize co-integration techniques to estimate a peculiar(a) model of investment. In particular we are interested in exploring the empirical validity of the acceleration principle. The fundamental contribution of this paper is two fold. First, we shall utilize co-integrated nature of the data. Additionally, we shall use this model to examine the similarities and dissimilarities in US and UK investment trajectories and its determinants. Since investment is a key macro economic variable for growth and development, the inherent pauperization is to derive instructive results that are relevant to macro-economic policy formulation. The paper is structured as follows in segmentation 1 we do a literature brushup of the theories and empirical work on investment. In particular we initiate the discussi on by looking at the Keynesian ideas regarding investment. Then we shall look at the advances in the literature since then. In the subsequent sections we shall evaluate the performance of the models in regards to US data and then UK data using co-integration, error correction and differencing techniques. Finally, the last section will summarize the findings and conclude. 2. literature review The central feature of the neoclassical renaissance post 1870 was the distribution theory based upon marginalist principles (Fisher, 1930 Marshall, 1890 Walras, 1874). Essentially the theory implies a negatively sloped demand for capital. The idea was that entrepreneurs would go on