This assignment should be an empirical application of the methods learnt in the course

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Topic for the group assignment
This assignment should be an empirical application of the methods learnt in the course. You can work on your own ideas or follow the sample topic described below; the same evaluation criteria will be applied to the two options (none of the options will be penalized).
You can start from describing a relation of interest between a variable 𝑦 and some explanatory variable 𝑥, and formulate some hypothesis you want to test. Then you can estimate a simple regression model including only the explanatory variable 𝑥 and test the hypothesis of interest, describe results and discuss why this simple model can be unreliable. Then you can consider a multiple regression model that you find more suitable, present and interpret results appropriately.
For the analysis, use cross-sectional data publicly available. Good data sources include the World Bank (World Bank Open Data | Data), the IMF (IMF Data Home Page - IMF Data), Eurostat (Database - Eurostat (europa.eu)), the OECD (OECD Data), but you can also use data from other sources. In any case, make sure the sample size is large enough (no less than 50 units, remember that estimate become more accurate when the sample size increases).
Provide descriptive statistics for the data used in the second section.

Sample Topic – Barro-style Regression
“Barro-style regression” refers to a type of growth regression analysis that became popular in the 1990s. It draws upon both transitional dynamics (including the speed of convergence) and steady-state aspects of neoclassical growth theory, such as the Solow model. A key hypothesis that this type of analysis seeks to test is the P-Convergence hypothesis, i.e. the tendency for poor countries to grow faster than rich countries (Barro and Sala-i-Martin 1992, “Convergence”, Journal of Political Economy, vol. 100, 223-251).
The relationship you want to analyze in this case is therefore the one between the level of output (GDP-per-capita) of an economy at some point in me and the subsequent rate of growth of experienced by that economy. You can find the data necessary for this type of regression in the Penn World Table (PWT 10.01 | Penn World Table | Groningen Growth and Development Centre | University of Groningen (rug.nl)). After estimating the simple regression, discuss why the model is too simplistic, and propose and estimate a multiple regression model that you think is more reliable.

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