Macroeconomics and modelling policy
Section A. [60 marks]
1) What are the new empirics of global inequality? Describe some of the debates that have been discussed in the literature, in particular relating to the convergence hypothesis and the polarisation of global incomes.
Section B. Answer all parts of Question 2 [40 marks]
2) In his 1997 paper Nickell tests for the determinants of unemployment across OECD countries. He undertakes several tests to investigate the determinants of unemployment and labour supply. The two sets of analyses are presented in Table 1 and Table 2 below.
Table 1 presents his first set of results.
A) What is the dependent variable? What are the independent variables? [5 marks]
B) What is the sample size for each regression run? [2 marks]
C) Over what time period is this being tested for? [3 marks]
D) Which of the independent variables are significantly associated with the dependent variable for each regression? Show how you come to your conclusions. [5 marks]
E) What are the regressions saying about the variables which are significant? What does the evidence say about unemployment in OECD countries? [15 marks]
In Table 2 Nickell (1997) runs another set of regressions to test for the determinants of labour supply measures.
F) What are the different measures of labour supply that are used in the analysis? And which variables show up to be significant determinants of labour supply? [5 marks]
G) What conclusions can one make from Table 2 about the determinants of labour supply? [5 marks]
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