Purchasing power parity modelying
1.you have to use Gretl program
2.your paper should be no more than (2500) words. empirical results should be presented (usually tables) in the body of the project itself. do not just copy and paste gretl output.
3.the purpose of the is for you to demonstrate your understanding of the econometric techniques used to investigate some well-defined economic theories. the focus of the work should be the econometrics, not the economic theory, but you will be required to demonstrate that you can translate the empirically testable features of the theory into features in a model.
4.a few well-known papers are cited bellow for your information. of course, you are by no means restricted to follow the approaches taken by these papers. use the theoretical knowledge you have gained in the course, explore and experiments with an inquisitive mind.
Using at least two different modelling approaches, investigate the support for purchasing power parity (ppp) for three countries. do your data give support for ppp when you consider countries pair-wise? what if you when consider multiple countries jointly? discuss your results, the advantages and disadvantages of your approach placing your analysis in the context the literature.