SHE Level 4
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code MHL122488
Module Leader Thulani Moyo
School Glasgow School for Business and Society
Subject Economics
  • A (September start)

Pre-Requisite Knowledge

-360b7 Intermediate Micro- and Macroeconomic Theory b7 Sampling Theory and Inferential Statistics b7 Matrix Algebra

Summary of Content

This module is concerned with theory and practice underlying the development of quantitative economic models, how we can best specify the underlying economic theory in the form of a statistical model and how we can then best estimate the resulting equation using relevant data. The module focusses mainly on the basic Ordinary Least Squares (OLS) model, which is developed from first principles, applied to a variety of micro- and macroeconomic scenarios and tested for its adequacy. The shortcomings of the OLS model are considered and the techniques for assessing the adequacy of the estimated models are described and applied. Developments of the OLS model, in particular the Generalised Least Squares (GLS) model and Limited Dependent Variable model are considered. An introduction to Time Series methods is also given, though limited to standard ARMA and ARIMA models. Some consideration is also given to the problem of Autocorrelation and Spurious Regressions. Students will be expected to be equipped with the essential algebraic and statistical skills (these are revised at the start) and while the module will examine the underlying theory and process of Least-squares Regression and Time Series methods, the emphasis will be on the practical construction, testing & estimation of the models: the rendering of data; construction of an appropriate economic model and estimator; testing of the model and presentation/critique of results. Models will be estimated using, where appropriate, an electronic spreadsheet and econometric software (e.g. MicroFit, STATA) Summary of how PRME-related issues / topics are covered in this module: A wide variety of economic problems can be modelled and, using real data, policy solutions identified and simulated [Principles 1 ,4 ,5 & 6]


-360b7 Aims and objectives of Econometrics b7 Review of Matrix Algebra and its application to Econometrics b7 Review of Sampling Theory and Hypothesis Testing b7 The OLS Estimator : theoretical and statistical model b7 Testing overall significance and appropriateness of the OLS estimator (detecting Multicollinearity and Heteroscedasticity) b7 Testing parameter significance b7 Limited Dependent Variable models (PROBIT & LOGIT models) b7 Time Series Methods (ARMA; ARIMA Models) b7 The problem of Autocorrelation and spurious regressions

Learning Outcomes

On successful completion of this module, the student should be able to:" Understand the competing methodologies in Econometrics, particularly Regression-based versus Time Series approaches." Express postulated Economic Theory in the form of an Economic Model and to translate it into an appropriate Statistical Model" Render and apply data to a computer programme and obtain results" Test the significance and appropriateness of the model and consider strategies for improving the model" To consider the policy implications of the model's findings, taking into account its deficiencies.(PRME Principles 1, 4, 5 & 6)

Teaching / Learning Strategy

Lectures are used to explain the principles and methods of Econometrics Tutorials allow students to derive paper-based solutions to problems based on the lecture material. Computer labs allow students to derive computer-based solutions to larger problems based on the lecture and tutorial material. Students are expected to prepare solutions to the problems set out-with class time and to use the tutorials and computer labs as opportunities to be given assistance with any problems they have encountered and to receive feedback on their work. Practise files and fully worked solutions will be made available, at the appropriate times via the GCU-Learn VLE. GSBS will ensure that all modules are GCU Learn enabled and with the support of the Learning Technologists at the cutting edge of development of online materials. Academic staff and the Learning Technologists will continue to work together to develop and operate all modules on GCULearn to ensure student support and information sharing. Students are provided with formative and summative feedback via a variety of mechanisms. Feedback on coursework is provided within 3 working weeks of submission.

Indicative Reading

-426 -360-426b7 Baltagi, B.H, Econometric Analysis of Panel Data, 5 th Edition, Wiley, 2013 -360-426b7 Dougherty, C, Introduction to Econometrics, 4 th Edition, Oxford, 2011 -3b7 Greene W.H . Econometric Analysis, 7 th edition, Prentice Hall, 2012 -3 b7 Gujarati D.N and Porter, D.C, Basic Econometrics, 5 th Edition, McGraw Hill, 2009

Transferrable Skills

-360b7 By the end of this module students will have gained competence in the following key areas: -360b7 Analytical and critical thinking skills b7 Communication skills (oral and written) b7 Discussion skills b7 Problem solving skills b7 Interpersonal skills b7 Time management skills -360b7 Numeracy b7 Problem Solving Skills b7 Critical Thinking Skills b7 Communication Skills (results presentation) -360b7 Computing Skills (Spreadsheet & Econometric Software)

Module Structure

Activity Total Hours
Assessment (FT) 30.00
Independent Learning (FT) 126.00
Tutorials (FT) 11.00
Lectures (FT) 11.00
Practicals (FT) 22.00

Assessment Methods

Component Duration Weighting Threshold Description
Exam (Exams Office) 2.00 30.00 35% Closed book, unseen examination with a restricted choice of questions on Econometric Theory and Practice.
Course Work 01 n/a 70.00 35% A partially-seen, open-book in-lab test: two questions (i) Regression, (ii) Time Series. General description of models circulated in advance of test. Test held in examination-conditions with students being given individualised datasets and required to estimate and test models and to author short reports on their findings with the time allowed.