ASSIGNMENT ON ECONOMETRICS TOPIC DETERMINANTS OF VIETNAMS ECONOMIC GROWTH

NATIONAL ECONOMICS UNIVERSITY FACULTY OF ECONOMIC *** ASSIGNMENT ON ECONOMETRICS TOPIC: DETERMINANTS OF VIETNAM'S ECONOMIC GROWTH Hai Instructor: MSc Bui Duong Class: Financial Economics 62 Group: FE_62A_03 Hanoi, 2021 No Full name - ID Nguyễn Hà Anh 11200205 Nguyễn Thanh Thảo - 11203678 Phạm Minh Thăng 11203526 Thái Việt Trung 11208242 Contribution % 25 25 25 25 Sum 100 % INDEX INTRODUCTION 1.1 Problem 1.2 Research questions THEORY 2.1 Marxian theory of unemployment 2.2 Basic concepts 2.3 Related researches METHODOLOGY 3.1 Model and data a Describe the variables b Describe the data c Equation 3.2 Sample regression model 3.3 Test and inference a Interpret the meaning b Summary statistics and correlation matrix 10 c Multicollinearity 12 d Ramsey 12 e Normality 12 f Heteroscedasticity 13 3.4 Verification of hypothesis 13 a Are the results consistent with the theory? 13 b Are regression coefficients statistically significant? c Statistic for overall significant 15 COMMENT 15 CONCLUSION 16 5.1 Summary our work 16 5.2 Summary of answering the question 17 5.3 Recommend 17 5.4 Limitation 18 REFFERENCE 19 13 APPENDIX 19 I INTRODUCTION Problem Since the renovation in 1986, Vietnam has achieved certain achievements on the road to building a rich and strong country Uniting 80 million people and interacting with the world brings many great benefits to Vietnam, the first of which is FDI In the reconstruction and construction of the country, the rational use of this capital will help economic growth But opening up also makes Vietnam much influenced by the rest of the world such as high inflation Within the scope of this study, we will find out how population, inflation, and FDI affect Vietnam's economic growth Research questions (1) What factors affect GDP growth? (2) How can those factors affect GDP growth? III METHODOLOGY Model and data a Describe the variables Variabl es Dependen t variable Independe nt variables Factors Expect ed sign Data source World Bank indicator World Bank indicator GDP Gross domestic product (Trillion USD) UNR Unemployment rate (%) (-) FDI Foreign Direct Investment, net inflows (Trillion USD) (+) World Bank indicator Inflation rate (%) (+)/(-) World Bank indicator INF Referenc e b Describe the data Collected data shows information of basic factors related to the growth of an economy: GDP, unemployment rate, foreign direct investment indicator and inflation rate by year Data collections: We use data sources on the US index from 1970 to 2019 which are collected by the World Bank indicator – a verified source that is highly accurate and runs a model in EVIEW c Research models Applying the least squares method (Least Square) to run linear regression to measure the impact of factors such as direct investment (FDI), unemployment rate (UNR), inflation (INF) on Gross Product domestic (GDP) d Equation GDP = β0 + β1UNR + β2FDI + β3INF + u  Sample regression model: To test the influence of factors on GDP, we applied the theoretical basis and computing these models: (1) u GDP = β0 + β1UNR + (2) u (3) u (4) β2FDI + β3INF + u (5) β2INF + β3UNR*INF + u (6) β2FDI + β3INF + β4UNR*INF + u GDP = β0 + β1FDI + GDP = β0 + β1INF + GDP = β0 + β1UNR + GDP = β0 + β1UNR + GDP = β0 + β1UNR + ESTIMATE RESULT: Dependent variable: GDP Var C (1) 14.774 (***) -0.963 (*) UNR FDI (2) 3.572 (***) 38.035 (***) INF UNR*INF (3) 14.269 (***) (4) 4.820 (**) 0.200 -1.367 (***) 33.388 (***) -0.464 (***) (5) 21.743 (***) -1.197 -2.499 (**) 0.176 (6) 3.960 0.322 33.635 (***) -0.221 -0.035 R-sq 0.062 0.774 0.426 0.811 0.462 0.812 Adj R-sq 0.043 0.769 0.414 0.799 0.427 0.795 P-value (F-test) RMSE 0.081 0.000 0.000 0.000 0.000 0.000 5.822 2.856 4.555 2.612 4.408 2.609 MAE 4.958 2.206 3.891 1.900 3.882 1.876 MAPE 131.057 43.532 97.023 38.849 96.609 38.134 [*];[**];[***]: sig at 10%, 5%, 1% => The best model is: GDP = Sample result: Test and inference a Interpret the meaning On average: b Summary statistics Summary Statistics, using the observations – 50 Mean Median Maximum Minimum Std Dev Skewness Kurtosis GDP 10.70912 10.41708 18.23830 4.579631 4.208661 0.179079 1.729672 UNR 6.086333 5.715000 9.630000 3.990000 1.462418 0.913137 3.140404 FDI 0.178798 0.151714 0.511434 0.030310 0.123748 0.673643 2.765325 INF 2.675534 2.815795 5.397956 -0.355546 1.231244 -0.224151 3.490673 Jarque-Bera Probability 2.177514 0.336635 4.193740 0.122840 2.337812 0.310707 0.552167 0.758750 Sum Sum Sq Dev 321.2736 513.6720 182.5900 62.02130 5.363940 0.444095 80.26603 43.96291 Observations 30 30 30 30 UNR 0.232 FDI 0.808 -0.147 INF -0.550 -0.304 -0.391 b Correlation matrix GDP GDP UNR FDI INF Correlation of dependent variable and independent variables: Cor(GDP,UNR) = 0.232  The correlation between GDP and population is not at the same dimension, with the percentage of 23.2% Cor(GDP,FDI) = 0.808  The correlation between GDP and population is not at the same dimension, with the percentage of 80.8% Cor(GDP,INF) = -0.550  The correlation between GDP and population is not at the same dimension, with the percentage of -55% Comments: In general, the independent variables have a low correlation with the dependent variable, except for the inflation index variable In addition, the independent variables including the population variable and the FDI variable have a positive correlation with the dependent variable while the inflation index variable has a negative correlation with the dependent variable Correlation of independent variable and independent variables: Cor(POP,FDI) = 0.828 Cor(POP,INF) = -0.647 Cor(FDI,INF) = -0.369 Comments: II Descriptive statistics 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Question Mean of GDP Mean of population Mean of FDI Mean of inflation rate Standard deviation of GDP Standard deviation of population Standard deviation of FDI Standard deviation of inflation rate Covariance of GDP and population Covariance of GDP and FDI Covariance of GDP and inflation rate Covariance of population and FDI Covariance of population and inflation rate Covariance of FDI and inflation rate Correlation between GDP and population Correlation between GDP and FDI Correlation between GDP and inflation rate Correlation between population and FDI Correlation between population and inflation rate Correlation between FDI and inflation rate Test for Normality of GDP => Jacque Bera pvalue Test for Normality of population =>Jacque Bera p-value Test for Normality of FDI => Jacque Bera pvalue Test for Normality of inflation => Jacque Bera p-value Test for equality in Mean of GDP and population Answer 59380.07 78.53645 3302.885 54.91613 56778.58 9.303455 3613.908 117.0795 413363.183 186438261.539 -1604314.312 26929.969 -681.482 -151285.638 0.808 0.938 -0.249 0.827 -0.646 -0.369 0.027 (0.05) (Normality) 0.072 (>0.05) (Normality) 0.000 ( p-value of T-test Test for equality in Mean of GDP and inflation => p-value of T-test Test for equality in Mean of population and FDI => p-value of T-test Test for equality in Mean of population and inflation => p-value of T-test Test for equality in Mean of FDI and inflation => p-value of T-test Test for equality in Variance of GDP and population => p-value of F-test Test for equality in Variance of GDP and FDI => p-value of F-test Test for equality in Variance of GDP and inflation => p-value of F-test Test for equality in Variance of population and FDI => p-value of F-test Test for equality in Variance of population and inflation => p-value of F-test Test for equality in Variance of FDI and inflation => p-value of F-test 0.000 (