To quantify relationships between economic variables by means of statistical techniques.
Simultaneous Equation Bias, and Inconsistency of Ordinary Least Squares estimators, Identification problem, Methods of estimating simultaneous equation system – Indirect least squares and Two-stage least squares.
Auto-regressive and distributed lag models, Koyack Model. Partial adjustment model, Adaptive expectation model.
Stationarity, Test of stationarity, Dickey-Fuller test, Unit root, co integration, spurious regression, Engle – Granger test, Random walk model, Error correction mechanism, causality test, Granger and Sim’s test.
Engel Function – Estimation of Engel elasticities, Consumption function – Estimation of MPC, Demand function for goods – Estimation of own-price, cross-price and income elasticities.
Demand for Money – Estimation of income and interest elasticities, Production function- Estimation of returns to scale in Cobb-Douglas production function and estimation of elasticity of substitution in CES production function, Supply response function –Estimation of short-run and long-run price elasticities.